The Kuala Lumpur Composite Index (KLCI) rose to an all-time high of 1,411 points yesterday (29 Oct 2007) as dealers said that the stronger ringgit intensified buying by local and foreign funds.
The KLCI opened 5.40 points or 0.39 percent higher at 1,403.75 and closed at a new all-time high of 1,411.62, up 13.27 points or 0.95 percent. The composite index had touched an all-time closing high of 1,398.35 last Friday.
Anthony Dass, research head at Inter Pacific Research Sdn Bhd was quoted by Bernama as saying that the depreciating US dollar was pushing up the value of ringgit and increasing buying interest in the local currency.
The ringgit surged to 3.338 against the US dollar in late trading and reached a new 10-year high on brisk demand from foreign funds. There is speculation that the US Federal Reserve will cut interest rates on Wednesday.
The ringgit closed higher at 3.3385/3435 against the greenback, its strongest since the start of the 1997/1998 Asian financial crisis. It closed at 3.3480/3510 last Friday.
The ringgit has strengthened 5.4 percent this year against 4.4 percent in China’s yuan, but trailing gains in the baht, rupee, peso and the Singapore dollar. It is expected to climb up to RM3.00 per US dollar by end-2008.
“The strengthening of local unit has prompted foreign funds’ participation in the market, contributing to the uptrend,” Dass said.