ZLBT Forward Views >>> MYR, Economy and all that jazz

Economic Revival & Corperate Earnings To Drive FBM KLCI
The KLCI is likely to open higher taking cues from the strong U.S. markets overnight, a local dealer says. "The sentiment remains positive, but we are still likely to continue to trade in a range in the near term in absence of any local leads," he says, adding that the market will look to Malaysia's monetary policy meeting on May 5 for cues on the local economy. He tips a 1530-1550 range after the KLCI ended 0.4% higher at 1535.30 Thursday. Axis-REIT may rise on strong 1Q results; Hong Leong Bank (5819) may rise after the Malaysian High Court dismisses a suit by private equity firm Primus Pacific Partners to declare illegal the planned takeover of EON Capital (5266) by Hong Leong Bank.

Ringgit Rocks On
The USD/MYR is higher at 2.9700 vs 2.9640 in late Asian trade Thursday, as the local currency takes a breather after its recent winning streak, hitting multi-year highs along the way. The pair touched a fresh 13.5-year low of 2.9610 Thursday. "There is some short covering which is supporting the pair at the moment," a local trader says. Still, he reckons the pair could turn lower later in the day and tips support at 2.9650.

The Malaysian economy likely grew at least 4.5% in the first quarter of 2011 compared with the same period last year, a senior cabinet minister was quoted by state news agency Bernama as saying Thursday.

"Based on the data compiled in the first two months, the growth is seen not to be less than 4.5%," Nor Mohamed Yakcop, minister in charge of economic planning, was quoted as saying.

He said the trade-driven country may grow faster in the second half of 2011, with gross domestic product likely expanding 5%-6% for the full year. The economy grew 7.2% in 2010.

The official numbers for first-quarter GDP are due out next month.

HAPPY TRADING