ONLY MONEY CAN HELP THE ECONOMY – BUT DOES MUHYIDDIN HAVE IT & WHERE IS HE DEPLOYING IT? MALAYSIA MUST FLOOD THE MARKETS WITH LIQUITY, SAY ANALYSTS – EVEN AS BURSA STAGES A TECHNICAL REBOUND AFTER STEEP FALLS OF PAST WEEKS AHEAD OF MUHYIDDIN ANNOUNCEMENT ON PHASE 2 OF STIMULUS PLAN

BURSA Malaysia today continued its uptrend for the fourth consecutive day, boosted by market optimism on the second stimulus package announcement.

At 9.05am, key index FTSE Bursa Malaysia KLCI (FBM KLCI) gained 14.06 points to 1,342.15 compared to yesterday’s close of 1,328.09.

On the broader market, gainers outpaced losers 488 to 89, while 137 counters were unchanged, 1,296 untraded and 31 others suspended.

Turnover, meanwhile stood at 601.90 million worth RM258.05 million

“The first stimulus package worth RM20 billion missed the window of opportunity and failed to boost market optimism due to local political instability.

“However, with the current extended movement control order, it is important for investors to see the government’s next move in addressing the Covid-19 pandemic,” she said.

Two days ago, the government announced a six-month moratorium on loan repayments and the restructuring of outstanding credit card balances to alleviate financial impacts arising from the pandemic.

As of yesterday, the health crisis had claimed 23 lives in Malaysia with more than 2,000 cases of infection recorded.

Meanwhile, the S&P 500 rose more than six per cent at Thursday’s close after the US Senate passed a US$2 trillion (RM8.8 trillion) fiscal package to fight the outbreak.

This leads to an equity benchmarks gains of more than 2%in Tokyo and Seoul, while early gains in Australia gave way to a modest retreat.

On the heavyweight performance, 22 out of 30 counters recorded gains with financial counters leading the pack as Maybank gained 10 sen to RM7.37, Public Bank added 28 sen to RM15.82 and CIMB Group rose seven sen to RM3.57.

As for top gainers, consumer products and services stocks continued to dominate the chart with Nestle gaining RM1.90 to RM138.90, Panasonic Manufacturing adding RM1.28 to RM26.28 while sin counters Heineken and Carlsberg both shoot up 70 sen and 60 sen respectively to RM22.60 and RM25.80 respectively.

Oil counters meanwhile continue to be the top active with Sapura Energy, Bumi Armada and Hibiscus all inched half-a-sen to eight sen, 14 sen and 34 sen respectively.

The overall index performance was mostly positive, with the FBM Emas Index surging 126.06 points to 9,190.51 while the FBM 70 gained 222.91 points to 10,551.49 and the FBM Emas Shariah Index garnered 115.70 points to 10.020.07.

The FBMT 100 Index increased 116.51points to 9,120.17 and the FBM Ace rose 69.40 points to 3,748.82.

Sector-wise, the Industrial Products and Services Index added 1.87 points to 104.43, the Plantation Index slightly lost 0.96 points to 6,055.11 and the Financial Services Index was 185.03 points higher at 12,288.4.  BERNAMA

Malaysia must flood market with liquidity, economists say

THE extension of the movement-control order (MCO) necessitates a flooding of the Malaysian market with liquidity, Straits Times reports analysts as saying.

They said a technical recession in the first half of the year appears imminent, and whether the country can rebound in the second half depends on the amount of cash in circulation.

Estimates of a growth exceeding 4% for 2020 have been ditched as the government directive aimed at stemming the spread of Covid-19, now in force till April 14, forces businesses deemed non-essential to halt operations.

Economists believe that each fortnight at a standstill could drive Malaysia’s gross domestic product down by 1.5 to four percentage points.

The RM20 billion pledged last month by the previous Pakatan Harapan administration was mainly targeted at saving the tourism industry, and was announced before the MCO took effect.

Another RM75 billion is “imperative” to prevent bankruptcies and up to 2.4 million job losses, said MIER.

Citi Research said Bank Negara Malaysia’s (BNM) move to grant a six-month moratorium on loan payments, in addition to earlier measures including the release of RM40 billion in retirement savings, “will provide cash-flow relief for indebted households and reduce bankruptcy risk in the near term”.

However, these measures can result in problems later as interest on deferred loans accrues over the six months.

A solution is to make cash cheaper in the future, said the report.

Barclays regional economist Brian Tan expects BNM to cut interest rates by one percentage point, “with a growing risk of more and earlier cuts”.

This would mean a total reduction of 1.5 percentage points this year, rivalling the easing during the 2008 global financial crisis.

The crash in global oil prices, caused by the coronavirus pandemic and a price war between Saudi Arabia and Russia, has also curbed Putrajaya’s ability to spend.

If the current mark of US$25 (RM108) per barrel holds instead of the US$62 projected in Budget 2020, the Treasury could be left short of RM10 billion in petroleum revenue.

However, some officials with state-linked banks believe that up to RM100 billion may be channelled by leveraging other reserves, with a focus on cash handouts and boosting healthcare infrastructure.

Malaysia yesterday reported 235 new Covid-19 cases – a new daily high – bringing the nationwide total to 2,031, with 23 deaths. THE MALAYSIAN INSIGHT

BERNAMA / THE MALAYSIAN INSIGHT

.