Malaysia and global market summary for January 2024.
World Updates
Expect lower inflation and interest rates, some cuts in key rates, a steeper yield curve, a decrease in the USD, and a mild rise in stock values—a sort of Goldilocks situation.
Notable surge in global elections, with recent victories in Taiwanese elections by a pro-independence party adding to the heightened tensions between Taiwan and China.
European markets moved higher following the latest monetary policy decision from the European Central Bank, with three key interest rates remaining unchanged.
Global growth is set to remain resilient and pick up pace in 2025.
Malaysia Economy Updates
The ringgit opened lower against the US dollar as the latest US gross domestic product figures show their economy grew by 2.5% last year and US rate cuts may not happen as soon as expected
BNM has decided to keep the overnight policy rate (OPR) unchanged at 3%, expecting growth with domestic demand amid strong labor market conditions
Inflation is expected to remain modest, reflecting stable cost and demand conditions
The government’s intention to review price controls and subsidies in 2024 will affect the inflation outlook
US Updates
Gross domestic product, adjusted for inflation, grew at 3.3% in Q4 2023, showing resilience in recovery from the pandemic
The stock market has marched to all-time highs with a 24% gain, building on a decade of US outperformance
The economy likely grew at its slowest pace in 1-1/2 years as businesses throttled back on inventory investment, and consumer spending cooled a bit
The central bank is expected to keep its policy rate unchanged at the current 5.25-5.5% range
China Update
China's economic growth is likely to slow to 4.6% in 2024 and cool further to 4.5% in 2025
Starting in February, the People’s Bank of China will allow banks to hold smaller cash reserves in the reserve requirement ratio by 50 basis points, releasing 1 trillion yuan (USD 139.8 billion) in long-term capital
The property industry slump has dragged down economic growth, slowing the economy's rebound from the pandemic
Falling investment in the property sector is making them more dependent on the manufacturing and service sectors
Policymakers put aside 300 billion yuan of local funds that would be used to invest in onshore shares through state-owned financial firms
Alternative Investments
U.S. securities regulator granted approval for the first exchange-traded funds (ETFs) in the U.S. that track bitcoin
Crypto prices break below USD 40,000 as spot ETF hype wanes after FTX Sold about $1B of Grayscale's Bitcoin ETF in their liquidation plan
Ethereum (ETH) staking feature has been approved in Malaysia that allows customers to earn up to 3-4% returns
Gold prices touched an all-time high of $2,135.39/oz in December 2023, driven largely by a weak U.S. dollar & expectations the Fed will begin lowering rate
Oil prices gained about 3% after US economic data showed faster-than-expected growth in the last quarter, following tensions in the Red Sea that disrupted global trade and increased shipping costs and time
2024 January Market Outlook Update
Persistent inflation poses a concern for worldwide markets, yet it is anticipated to have reached its highest point, thanks to the restrictive measures adopted by global central banks and the delayed impacts of monetary policy on the economy. Forecasts indicate a downward trajectory in inflation figures, although they are expected to persist at levels higher than the norm thus to expect investment volatility. A diversified investment strategy is advisable, with a focus on segments within the global economy deemed appealing including equities and alternative investments.