Goldman Sachs says buy ringgit
Published: 2011/03/31
Goldman Sachs Group Inc says buy Malaysia’s ringgit against the US dollar on speculation the central bank will favor currency appreciation to help fight inflation.
The ringgit strengthened 1.3 per cent this quarter to 3.0256 versus the greenback as of 11:47 a.m. in Kuala Lumpur, according to data compiled by Bloomberg, less than one sen short of a 13- year high of 3.0210 reached on March 25. A government report that day showed consumer prices rose 2.9 per cent last month from a year earlier, the fastest pace since April 2009.
The US bank recommended buying 12-month non-deliverable forwards, betting the contracts will rise 5.8 per cent to 2.9 per dollar from today’s rate of 3.0695, according to a research note today from Goldman Sachs’ currency analysts including London- based Thomas Stolper. A stop-loss order should be placed at 3.08 to guard against losses in the trade, it said.
“Inflation in emerging markets remains one of the most important themes in foreign exchange,” the report said. “We think Bank Negara Malaysia will respond primarily by allowing the ringgit to strengthen, a stance that is also supported by strong activity growth and a large balance-of-payments surplus of about 15 per cent of gross domestic product.”
Goldman Sachs revised its forecasts for the ringgit’s spot price in three, six and 12 months to 2.98, 2.90 and 2.85. -- Bloomberg
Read more: Goldman Sachs says buy ringgit http://www.btimes.com.my/Current_News/BTIMES/articles/20110331144824/Article/index_html#ixzz1IAoDt51K
Comment: Maybe this is the reason for the strong performance of the Bursa today.
Published: 2011/03/31
Goldman Sachs Group Inc says buy Malaysia’s ringgit against the US dollar on speculation the central bank will favor currency appreciation to help fight inflation.
The ringgit strengthened 1.3 per cent this quarter to 3.0256 versus the greenback as of 11:47 a.m. in Kuala Lumpur, according to data compiled by Bloomberg, less than one sen short of a 13- year high of 3.0210 reached on March 25. A government report that day showed consumer prices rose 2.9 per cent last month from a year earlier, the fastest pace since April 2009.
The US bank recommended buying 12-month non-deliverable forwards, betting the contracts will rise 5.8 per cent to 2.9 per dollar from today’s rate of 3.0695, according to a research note today from Goldman Sachs’ currency analysts including London- based Thomas Stolper. A stop-loss order should be placed at 3.08 to guard against losses in the trade, it said.
“Inflation in emerging markets remains one of the most important themes in foreign exchange,” the report said. “We think Bank Negara Malaysia will respond primarily by allowing the ringgit to strengthen, a stance that is also supported by strong activity growth and a large balance-of-payments surplus of about 15 per cent of gross domestic product.”
Goldman Sachs revised its forecasts for the ringgit’s spot price in three, six and 12 months to 2.98, 2.90 and 2.85. -- Bloomberg
Read more: Goldman Sachs says buy ringgit http://www.btimes.com.my/Current_News/BTIMES/articles/20110331144824/Article/index_html#ixzz1IAoDt51K
Comment: Maybe this is the reason for the strong performance of the Bursa today.
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