Likely Greece debt default, Fitch Ratings downgrade hit ringgit, bourse
Published on: Tuesday, June 30, 2015
Kuala Lumpur: The sluggish performances of the ringgit and local stock market were due to the knee-jerk reaction triggered by concerns over Greece's debt default and the likelihood of Fitch Ratings credit-rating downgrade of Malaysia.Affin Hwang Investment Bank vice-president and head of retail research, Datuk Dr Nazri Khan, said the breakdown of bailout talks between Greece and foreign lenders affected worldwide sentiments and impacted the regional stock markets."We anticipated the impact on the local stock market after talks broke down. It's an early anticipation from the market that Greece will default on the €1.6 billion of loans from the International Monetary Fund due tomorrow," he said on Monday.
ADVERTISEMENT
He said, however, the impact on Malaysia was expected to be minimal as the country's direct exposure to Greece was less than five per cent of the total trade."The local stock exchange is expected to normalise within one or two weeks and encourage investors to buy stocks with good fundamentals at a cheap price," he said.Nazri said the anticipation of the US Federal Reserve's interest rate increase also contributed to the weakening of ringgit."The local unit hit 3.78 per US dollar, the weakest in 10 years as a result of the combination of factors," he said.
ADVERTISEMENT
Stay up-to-date by following Daily Express’s Telegram channel.
Daily Express Malaysia
