Malaysia and global market summary for November 2023.
World Updates
The largest economies in the world delivered better than the expected growth. The US GDP rose by 4.9% in the third quarter 2023
The Israel and Palestinian Hamas military conflict increased market volatility and surge in commodities.
Chinese property market continued slump overhanging China's economic outlook
Investment and consumption demand is expected to weaken on lag monetary policy effects, high uncertainty, and US recession spillovers.
Malaysia Economy Updates
Bank Negara Malaysia has maintained its overnight policy rate (OPR) at 3%, given the stable domestic inflation and growth outlook.
Ringgit was traded almost flat at the opening against the US dollar on lack of fresh buying interest amid low volatility.
Malaysia GDP expanded 3.3% from a year earlier in the July-September period with pick up in consumption and government spending
Headline inflation continue to slow to 1.8% in Oct with the index points recorded at 130.9, compared with 128.6 last year
US Updates
US markets rallied on a downward inflation trend, still strong domestic economy & labour market and the Fed’s dovish tone followed by the European equities.
US Senate passed spending bill to fund through early February 2024.
Moody's downgraded the US government's credit outlook due to political polarization, fiscal deficits & declining debt affordability.
Mixed guidance from retail bellwethers clouded consumption outlook in Q4.
China Update
China continues to focus on reviving economic growth although the property market sector remains weak with worsening home prices & downbeat capex by property developer
China new yuan loan slumped to RMB 738 billion, growing at the slowest pace of 10.9% yoy since April 2022
China's policy easing continues to be supportive for both China H&A shares, adding to the reasons why this market is still relevant.
Further stimulus is expected to step up while the recent gradual rollout of measures is taking time to revive economic growth including new housing stimulus, issuance of sovereign bonds and increasing budget deficit.
2023 November Market Outlook Update
Sticky inflation remains a concern for the 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 likely to continue trending downwards, albeit remaining at higher-than-average levels. Short-term volatility is likely to prevail and a diversified approach to investing while having exposure to segments within the global economy including US and Japan equities, commodities, and local bonds.
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