Malaysia and global market summary for December 2023.
India has surpassed Hong Kong to become the world’s 7th largest stock market, boasting a market capitalization of USD 3.989 trillion.
Oil is poised for a weekly gain, driven by concerns about the security of Red Sea shipping.
Crude oil prices experienced a decline overnight following Angola's announcement of its decision to leave the Organization of the Petroleum Exporting Countries (OPEC).
Higher global semiconductor demand is expected to have positive repercussions on Asian economies that are export-oriented.
Malaysia Economy Updates
The Malaysian Ringgit concluded marginally higher against the US dollar amid positive sentiment in anticipation of global interest rate cuts next year.
Malaysia will implement a 10% sales tax on imported goods purchased online, valued under RM500, starting January 1, 2024.
Malaysian companies have reported solid 3Q earnings, with sectors like finance and healthcare experiencing robust growth.
US inflation has cooled to 3.1% year on year in November, fueling expectations of rate cuts.
Prices in the US for a broad range of goods and services edged higher in November but were mostly in line with expectations, further easing pressure on the Federal Reserve.
The US Federal Reserve projects three rate cuts in 2024, acknowledging that inflation has eased but remains elevated.
Market valuations in China are beyond historical lows, marked by weaker factory activity, muted consumption, and disinflationary pressure in a sluggish property market.
Property developer China South City Holding is facing challenges in paying interest on its foreign-currency debt, grappling with issues in the property sector.
China's policy easing continues to support both China H and A shares, with further stimulus expected through measures such as multiple rate cuts and the latest reduction in the required reserve ratio (RRR).
2023 December Market Outlook Update
Sticky inflation remains a concern for global markets. However, inflation is likely to have peaked due to the tightening stance of global central banks alongside the lag effects of monetary policy on the economy. Inflation numbers are expected to trend downwards, albeit remaining at higher-than-average levels. Contingency planning should consider the worst-case scenario of a global war or pandemic, the best-case scenario of a mild to moderate recession, as well as the Goldilocks scenario of skipping a recession and moving into recovery. Short-term volatility is expected, and a diversified approach to investing is advisable, with exposure to various segments within the global economy.