KUALA LUMPUR (Bernama) – Prime Minister Datuk Seri Najib Tun Razak’s announcement of a revised budget for 2015 is ‘neutral’ to ‘slightly positive’, said Hong Leong Investment Bank (HLIB).
In a note yesterday, HLIB said the impact would be so given the government took a pragmatic and balanced approach to address the headwinds faced by the country while still showing the will to exercise prudence and restraint in spending via cuts in operating expenditure.
HLIB said although Fitch Ratings would review the country’s rating in the first half of 2015 (1H15) and may downgrade the sovereign, it believed the current account would remain in surplus, albeit lower.
“However, sentiment will remain fragile in 1H15 in view of low oil price and uneven global growth. This could continue to induce volatility,” it said.
Meanwhile, Kenanga Investment Bank Bhd said although the ringgit was at its weakest level since 2009, having lost about 12 per cent in the past six months, it believed the local note would eventually regain strength as the economy, both domestic and global, improved later in the year.
“It’s quite right that Bank Negara Malaysia felt no compelling reason to intervene, as the current level could hardly be labelled as dire and prefer to allow it to run its natural course in the hope that the economy would revert to the average long-term trend by 4Q15,” it said in a note.
Kenanga has maintained its 2015 ringgit vis-a-vis US dollar forecast of 3.38 by year-end.