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Donald Trump"s election victory has raised concerns about inflation and higher global bond yields due to proposed tax cuts and steep tariffs. Analysts predict that his policies could disrupt the Federal Reserve"s rate-cutting cycle, leading to an upward bias on Treasury yields, while European bonds may offer more value amid potential volatility. The risk of widening inflation gaps could weaken Asian currencies, complicating the economic landscape further.
Malaysia's ringgit, the only emerging Asian currency to appreciate against the dollar this year, faces challenges due to potential tariff increases following Donald Trump's election win. The currency has already weakened, hitting its lowest point since August, as fears of a stronger dollar and higher tariffs loom. With the US being Malaysia's third-largest export market, accounting for 11% of exports, the ringgit is vulnerable to further depreciation.
IHH Healthcare Bhd has issued its first RM4 billion sukuk to finance the acquisition of the 600-bed Island Hospital in Penang, marking one of Malaysia's largest unrated sukuk offerings this year. The issuance, arranged by OCBC, received strong support with a subscription rate exceeding four times the issuance size. This acquisition enhances IHH's position in the medical tourism sector, adding to its portfolio of 18 hospitals in Malaysia.
Malaysian tycoon Lim Kang Hoo is considering the sale of his toll road assets, potentially valuing them at up to 5 billion ringgit ($1.1 billion). As the largest shareholder of Ekovest Bhd., he is collaborating with a financial adviser to divest a majority stake in Konsortium Lebuhraya Utara-Timur (KL) Sdn. Interest from other industry players is anticipated.
Malaysian bonds are facing increased vulnerability to outflows, with a net withdrawal of 11.2 billion ringgit ($2.6 billion) last month, the largest since March 2020. This trend is driven by rising local yields in tandem with U.S. Treasury yields, exacerbated by a stronger dollar and the ringgit's decline.
Shanghai DC-Science Co., a Chinese data center developer, is seeking a private loan of $600 million to $700 million to finance its Brightray DC project in Johor, Malaysia. The first phase of the project is set to be completed by February, according to the company's website.
Malaysian Prime Minister Anwar Ibrahim has mandated an internal audit of the sovereign wealth fund Khazanah Nasional Berhad following investment losses amounting to 43.9 million ringgit ($10 million). The audit aims to ensure that all government-linked companies meet their responsibilities, including state-owned asset manager Permodalan Nasional Bhd.
Bank Negara Malaysia has stated that the recent weakness of the ringgit is temporary and assured that it is prepared to manage any excessive volatility. The central bank emphasized that Malaysia's strong fundamentals, positive economic outlook, and ongoing structural reforms will support the currency in the long term.
The U.S. Federal Reserve's recent interest rate cuts are expected to benefit Southeast Asian economies, particularly Indonesia and Thailand, by boosting portfolio inflows and commodity prices. Central banks in these countries are likely to follow the Fed's lead, with Indonesia already cutting rates for the first time in three years. The Thai baht has strengthened, prompting calls for further rate cuts to stimulate investment and address high household debt.
Malaysia's currency is poised for its largest monthly decline since 2015, with the ringgit down over 6% against the dollar in October. As of Wednesday, it traded at 4.39 per dollar, reflecting investor caution amid uncertainties surrounding the US election.

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