KUALA LUMPUR: The Malaysian stock market and the ringgit advanced in late Wednesday morning trade as investors turned upbeat after Fitch Ratings raised the outlook on Malaysia to Stable from Negative.
At 10.40am, the FBM KLCI surged 28.66 points or 1,735.30. Turnover was 809. 32 million valued at RM561.46mil. Advancers beat decliners 547 to 121 while 189 counters were unchanged.
The ringgit strengthened to 3.7408 against the US dollar.
Fitch Ratings affirmed Malaysia’s Long-Term foreign currency Issuer Default Rating (IDR) at ‘A-‘ and local currency IDR at ‘A’.
The international ratings agency said the issue ratings on Malaysia’s senior unsecured local currency bonds were also affirmed at ‘A’.
“The Outlook on the Long-Term IDRs has been revised to Stable from Negative. The Country Ceiling is affirmed at ‘A’ and the Short-Term Foreign Currency IDR is also affirmed at ‘F2’,” it said.
At Bursa Malaysia, KL Kepong rose 62 sen to RM22.02, MISC 32 sen to RM8.04, UMW gained 28 sen to RM10.42.
Public Bank added 26 sen to RM18.98, IHH 23 sen to RM5.86 and DiGi edged up 22 sen to RM5.58.
MIDF Economic Research said the review is in sharp contrast to the market’s expectation of a downgrade by as much as two notches on Malaysia’s credit rating, following its earlier remark in March on such a possibility because of worsening trade balance and a state investment company’s struggles to meet its debt obligations.
“Fear of the downgrade has dampened the equity market sentiment and sent the ringgit to near 10-year low earlier this week,” it said.
MIDF Research said this is positive for Ringgit which it had highlighted earlier as the only supporting factor for Ringgit in the near-term although “we have not been anticipating any downgrade from the rating agency. The Star.