Malaysia is expected to benefit from stronger foreign fund inflows, a stronger ringgit and better demand for its exports after the US Federal Reserve (Fed) cut interest rates for the first time this year.
At 10am, the ringgit was at 4.2020, down 0.19% against the US dollar since it opened in early trade on Friday.
The Fed's first rate cut since December 2024 came as the US unemployment report narrowed to 4.3 per cent, as chairman Jerome Powell signalled more easing ahead to reduce labour market risks and offset tariff-related inflationary pressures.
SPI Asset Management Managing Director Stephen Innes said the move was seen as a signal of global liquidity that could set the stage for stronger foreign inflows into the Malaysian market.
He said while the 25 basis point cut did not directly change Malaysia's fundamentals, it provided a more supportive backdrop for risk assets across emerging markets.
Bursa Malaysia could benefit from stronger foreign inflows as global investors shift to emerging markets with improved carry appeal and valuations, particularly in the export and commodity-related sectors.
Innes also noted that the broader economy will feel the impact mainly through capital flows.
He added that Malaysia's central bank cut the overnight policy rate (OPR) in July and left it on hold in September, signaling caution not to be seen as simply shadowing the Fed.
At the opening of trade, the ringgit was higher against a basket of major currencies.
It strengthened against the Japanese yen to 2.8297/8457 from 2.8484/8520 at Thursday's close, rose to 5.6744/7062 against the British pound from 5.7238/7306 and was higher against the euro to 4.9355/9632 from 4.9654/9714 previously.
The local currency was also stronger against ASEAN currencies.
The ringgit rose against the Singapore dollar to 3.2661/2847 from 3.2800/2842, rose against the Thai baht to 13.1209/2037 from 13.1903/2114 yesterday
It also rose to 253.3/254.8 against the Indonesian rupiah from 253.7/254.2 and strengthened against the Philippine peso to 7.33/7.38 from 7.35/7.36 on Friday.
