This Week’s Top Headlines

i) The ringgit continues to rally against the US dollar. Closing at RM4.5530 on Friday, it is up 2.22% in the past two weeks. Many are attributing this strength to Bank Negara Malaysia’s direct intervention in the Forex market, but this is far from the true reason for the surge.

ii) Work-Life Balance matters. According to a recent survey conducted by Ranstad, it is the top reason for Malaysian employees to switch jobs. Other findings show that Malaysians want to feel appreciated at work and find non-monetary benefits vital.

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Ringgit extends rally against major currencies.

Malaysians breathe a sigh of relief as the ringgit regained momentum versus other major currencies this week.

The local note closed at RM4.5530 against the greenback on Friday, representing a 2.22% increase in the past two weeks.

The ringgit has also demonstrated similar strength against the Singapore dollar. It closed at RM3.4209, rallying by 2.26% from its all-time low of RM3.50 on 12 July.

The pound sterling, which soared to a 7-year high of RM6.0456 on 12 July, has also cooled off somewhat. The ringgit gained 3.21% to RM5.8516 in the past 18 days.

The recent uptick led many to believe that it is due to Bank Negara Malaysia’s direct intervention in the currency market, as the central bank announced the move late last month.

However, when we dig deeper into BNM’s balance sheet, we’ll understand that the ringgit’s surge did not originate from the central bank.

BNM’s foreign currency reserves stood at US$99.2 billion as of 30th June, and half a month later, on 14th July, the reserves stayed level at $99.2 billion.

Had BNM intervened in the currency market, its FOREX reserves would have dwindled by a noticeable sum.

Moreover, the central bank only has the power to stabilize the ringgit's fluctuations and ensure that we don't see big swings on a day-to-day basis. It does not have the capability to “turn on the jets” for the ringgit.

So what are the reasons for the ringgit’s rally?

On Wednesday, the Federal Reserve approved a widely expected 25-basis point rate hike, bringing the Fed funds rate to 5.25-5.50%.

Borrowing costs in the US are now at a 22-year high, and Chairman J. Powell indicated that the Fed would be more data-driven on future increases.

While the Fed has left the door open for more rate hikes, markets are pricing in the reverse.

The majority of investors believe that the Fed will keep rates steady at its next meeting and possibly for the rest of the year.

With the end of the Fed’s tightening in sight, the US dollar index, which tracks the strength of the greenback versus other currencies, weakened.

It slipped 0.30% following the Fed’s meeting, which could partially explain the strength of the ringgit.

Another reason for the ringgit’s recent uptick is that foreign investors are making an aggressive comeback to the Malaysian market.

In the past two weeks, they turned to net buyers on Bursa Malaysia, acquiring RM749.9 million of equities.

According to MIDF Research, this was the largest net inflow since February 2022.

The returning interest from foreigners marks a significant shift in sentiment, especially after they've been dumping equities for 12 consecutive weeks previously.

On Thursday, PM Anwar announced the Madani Economy Framework, with the aim of boosting Malaysia’s economy and better the lives of people.

Economy Minister Rafizi Ramli said that Anwar unveiled investments amounting to RM25 billion.

This initiative, apart from being another driver of the ringgit’s strength, will be able to create a better business environment that will attract more investors both FDI and local investors to invest in Malaysia.

How Important is Work-Life Balance?

According to Ranstad’s 2023 Employer Brand Research survey, work-life balance is the top reason for Malaysians to switch jobs.

Half of the respondents agree that they would leave their current employers to fulfill this objective, despite the rising cost of living and inflation.

Different generations have different work priorities, but the pattern remains the same.

All three generations - Gen Zs, Millennials, and Gen Xs value work-life balance much more than other motives.

When asked what makes an ideal employer, respondents prefer companies that offer attractive salaries and benefits.

The 2nd and 3rd choices are good work-life balance and a healthy financial status, respectively.

87% of respondents find non-monetary benefits very important.

Examples of these perks include flexible working hours, the option to work from home (WFH), and a sense of belonging to the working environment.

Meanwhile, almost 2 in 10 Malaysians switched jobs in the first half of 2023. More than a third are planning to change careers this year, while almost 4 in 10 of them are afraid to lose their jobs.

It is this fear that drives employees to look for better, more stable jobs.

Malaysians also desire hybrid work as it will improve job satisfaction and give them the freedom to balance their personal lives.

23% of respondents say that they would leave their current jobs to save money on commuting, meals, and other work-related expenses.

Malaysians are eager to upskill themselves and learn despite the contrary belief.

83% of respondents say that personal career growth is crucial, but only 61% of them have adequate opportunities and resources to do so.

The Randstad Employer Brand Research captures the sentiment of employees and job seekers between the ages 18 and 64.

The survey analyzed 2,529 Malaysians across 32 markets.

Insights were compiled by The Edge.

That’s all for this week’s newsletter!

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. The opinions of this newsletter are solely that of the publisher.

Get early access to our newsletter and miss nothing from the markets. Join our journey towards financial literacy today.

Our private announcement group will keep you updated with market movers and urgent matters. For only $1/month, you'll receive our weekly newsletter every Sunday night and daily notifications on important events, some with detailed thoughts from economist Mr. Sani Hamid and RinggitPlus founder Hann Liew.

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