Bank Negara: Investor sentiments better due to positive global developments

KUALA LUMPUR: Investor sentiments improved in November mainly due to positive global developments.

In its September highlights, Bank Negara Malaysia (BNM) said these include an improved economic outlook amid greater clarity on the direction of US policies following the end of the presidential election, and positive developments following the approval and deployment of Covid-19 vaccines.

“As a result, global equity indices recorded broad-based gains, including recoveries across sectors affected by the pandemic.

“Amid this background, the FBM KLCI increased by 6.5 per cent during the month,” it said.

It said the improved risk appetite also led to continued non-resident inflows to the domestic bond market following yield-seeking activities by investors, which contributed to an appreciation of the ringgit against the US dollar by 2.2 per cent.

While the government bond market remained supported by these inflows, uncertainties surrounding the parliamentary vote of 2021 Budget led to marginally higher yield in the 10-year Malaysian Government Securities towards the end of the month.

BNM said the banking system capitalisation levels remain well-positioned to absorb earning shocks and support intermediation activity.

“Capital ratios were largely unchanged as new issuances of debt instruments offset the marginal decline in Common Equity Tier 1 capital from dividend payments and reduction in unrealised gains from financial instruments’ capital component.

“Banks’ excess capital buffers stand at RM125.1 billion as at November 2020,” it added.

Source: NST