Trade Performance and Fund Flow Week Ended 20 December
- Emerging markets experienced broad declines last week with all ten indices observed closed lower week-on-week, while the MSCI Emerging Markets (EM) reverting to a net loss position by closing 3.1% lower. Although the US Federal Reserve trimmed its benchmark interest rate by 25 bps to a range of 4.25% - 4.50% last week, the central bank also signalled two rate cuts for next year, fewer than the four rate cuts in its previous projections in September. This came after the US Fed’s Summary of Economic Projections (SEP) forecasted the country’s economic growth to be better than expected while inflation would remain above the 2.0% target in 2025. Global investors rotated out of the ten exchanges observed last week.
- US Federal officials also indicated two more rate cuts in 2026 and one in 2027.
- China’s stock markets ended on a negative note last week, as the SHCOMP and SZCOMP indices shrank 0.7% and 1.4%, respectively. China’s retail sales grew 3.0% year-on-year (YoY) in November, the slowest in three months, as compared to October’s 4.8% YoY growth. Last week, the People’s Bank of China left its benchmark loan prime rate unchanged at 3.10%. However, news reports indicate that China’s top leaders have agreed to increase fiscal spending in 2025 to strengthen its economic growth, therefore raising its budget deficit to a new high of 4% of GDP, while maintaining GDP growth of around 5% next year.
- The FBMKLCI extended its downward trajectory last week, closing below the psychological level of 1.600pts. This cautious sentiment was echoed across regional markets, despite the widely anticipated 25 basis points rate cut during the December FOMC meeting. The U.S. Federal Reserve also expressed concerns that higher tariffs imposed by the incoming Trump administration could spur inflationary pressures, potentially signaling a slower pace of monetary easing ahead.
- Overall market capitalisation ended the week on a downbeat note, declining by 1.2% to RM2,025.20 bil. This decrease was largely attributed to a broad-based market pullback, with 10 out of 13 sectorial indices recording week-on-week (WoW) losses.
Published Date
24 Dec 2024
Publisher
Bursa Digital Research
