This Week at a Glance…

i) Malaysian market rallies but ringgit depreciates.

The FBMKLCI is up 4.36% since the start of the year, spurred by net inflows from foreign funds. But this has failed to prop up the ringgit, which fell to RM4.7339 against the dollar on Monday.

ii) Wise: The go-to e-Money app to buy and hold foreign currencies?

Regulated by BNM, Wise allows you to store, spend, and transact in 50+ global currencies.

iii) Sarawak to raise its stake in Affin Bank to 30%.

This would make the Sarawak government the largest shareholder of the bank, overtaking the Armed Forces Fund Board (LTAT).

Scroll down to read the details.

The Malaysian market is currently at a 17-month high.

In the past 35 days, the FBMKLCI improved by 4.28% to 1513 points, an impressive performance that has sent it to a 17-month high.

Major banking stocks such as Maybank (RM9.34), Public Bank (RM4.43), and CIMB (RM6.23) are all up by a significant margin, while Tenaga Nasional closed at RM10.74 - a level not seen since March 2021.

As of Jan 26, the FBMKLCI ranked fourth on YTD performances versus 11 other Asian indices.

We’re now firmly ahead of major markets like China, South Korea, and Singapore.

MIDF’s fund flow report shows consistent net buying from foreign investors.

It’s safe to say that the entire reason for the outstanding performance of the FBMKLCI comes from them.

During the Thaipusam week, they contributed to a net inflow of RM267.7 million, while over the past month, they invested a net total of RM630 million in Malaysian equities.

Stocks among the top picks include YTL Power International, Maybank, and CIMB.

Local institutions, meanwhile, were focusing on RHB Bank and Tenaga Nasional.

Moving forward, analysts are confident that the positive momentum will continue.

Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the local market is expected to remain above 1,500 points, supported by the upbeat in the US market and BNM’s decision to hold the OPR at 3.0%.

Nonetheless, we should not discount the possibility of some profit taking over the next week.

FBMKLCI is up, but the ringgit is down?

To those who do not invest in the Malaysian market, its performance is more important than you think.

Historically, the FBMKLCI has moved somewhat in tandem with the Malaysian ringgit.

Therefore, a rally in the local market should bring a similar uptrend to MYR.

But what we’re seeing more recently is quite the reverse – the local market is performing but the ringgit is deteriorating.

This could mean two things: either the ringgit or the FBMKLCI is bound for a retracement soon.

“Speaking of currencies, where can I buy and hold the US dollar?”

On Friday, I opened a Wise account.

For those who are unfamiliar, it is an e-money app that allows you to hold and transact in over 50 global currencies.

You can convert between them whenever you need. The sign up is completely free, and there are no monthly fees.

Wise is also regulated and licensed by Bank Negara Malaysia.

Everything, from registration, deposits, and withdrawals, can be done entirely online.

The sign up process took me less than 5 minutes, and I got approved in half an hour.

The exchange rates of Wise are pretty competitive.

You can convert between currencies easily with a small variable fee:

• 0.65-0.67% for USD.

• 0.70-0.72% for SGD.

The smallest amount that you can convert is RM10, and the fees will stay the same.

When converting a currency, Wise uses the “real” rate or the mid-market rate.

This means that you’ll always get the most accurate exchange rate and you don’t have to worry about the spreads between buying or selling.

If you're planning to travel abroad, Wise is a great option.

You can get account details in 10 major currencies, including USD, SGD, and GBP.

You’ll be able to receive foreign currencies just like a local, without any fees, as long as the transfer is non-wire.

The debit card allows you to spend in over 150+ countries and is cheaper when compared to credit cards.

CCs typically charge ~1% for overseas transactions, and their markup rates for foreign currencies are much higher.

But with Wise, the only fee incurred is the conversion fee (which I listed above).

Wise could be a good way for you to diversify your portfolio, But…

The biggest con is that it does not allow you to invest your savings, meaning that the foreign currency will be left dormant in your account.

Still, at the rate at which MYR is depreciating, holding a stronger foreign currency could just help you fight against local inflation.

Better yet, if you’re planning to travel abroad and believe that the ringgit will weaken, you can convert some of the money first, and more when your trip nears.

I'll be exploring this app in the coming weeks and write a full review about it soon.

If you’re interested in trying out Wise, sign up with my referral code today and you’ll get a free debit card!

Sarawak to hold 30% of Affin Bank

The Sarawak government plans to increase its shareholding in Affin Bank to around 30%.

This would place it as the bank’s largest shareholder, overtaking the Armed Forces Fund Board (LTAT).

When asked why the government was keen on owning a stake in a bank, Sarawak Premier Tan Sri Abang Johari Abang Openg said that the state needs a bank to “boost SMEs and business activities”.

Currently, Sarawak holds 112.56 million shares of Affin, or a 4.80% stake, making it the 5th largest holder.

A source told The Edge that Sarawak plans to acquire Boustead’s entire 20% holding and a bit of LTAT’s as well.

Share prices of Affin Bank surged 5.68% to RM2.65 following the announcement.

The stock has gained 23.15% in the past month in anticipation of Sarawak raising its stake.

If you’re interested to invest in the Malaysian market but have yet to register for a CDS account, try out Rakuten Trade.

The platform allows you to invest in MY, US, and HK stocks, including various types of ETFs.

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DISCLAIMER: The information contained in this newsletter is for informational and educational purposes only. Nothing herein shall be construed to be financial, legal, or tax advice.