Fed minutes, Bank of Korea decision, Sri Lanka
Malaysian stocks rise as state palace announces prime minister
Malaysia-listed stocks rose as the the state palace announced Anwar Ibrahim as the nation’s prime minister.
The benchmark KLCI index traded 2% higher following previous negative sessions, trading at the highest levels in more than two months.
The Malaysian ringgit strengthened slightly against the U.S. dollar and last stood at 4.5080.
Bill Ackman says Hong Kong dollar peg will break
Billionaire hedge fund manager Bill Ackman questioned the sustainability of the Hong Kong dollar‘s peg to the greenback, adding that his firm Pershing Square has a significant short position on the currency.
“We have a large notional short position against the Hong Kong dollar through the ownership of put options,” the Pershing Square Holdings CEO said in a series of tweets.
“The peg no longer makes sense for Hong Kong and it is only a matter of time before it breaks,” Ackman wrote.
However, currency strategist at Bank of Singapore Sim Moh Siong said the peg will remain resilient as negative sentiment regarding China has recently “calmed down” with recent adjustments including China’s quarantine period for international travelers.
“The peg is likely to hold given that the fundamentals have continued to support the Fed,” he said. “I think things might [have] calmed down somewhat on the China front and that could in turn also add to the resilience of the Hong Kong dollar peg,” he said.
Grab, Gojek respond to Singapore’s move to expand job protection for gig workers
Grab said it broadly supports Singapore’s latest announcement to expand job protection and benefits for gig workers from 2024.
The decision includes guaranteeing injury compensation and pension payments as part of new standards for the gig economy, primarily affecting delivery and ride-hailing companies.
In response to CNBC’s request for comment, Grab said it is “broadly supportive” of the measures, adding the implementation needs to be “gradual,” citing current headwinds for the global economy, such as recession concerns.
“We will be guided by these considerations to ensure minimum impact on our partners’ earnings and consumer prices,” said Grab.
The company called for the measures to be also applied to all gig platforms citing fairness concerns.
Gojek said that the measures requiring companies to align the Central Provident Fund pension contribution rates with that of employers “will mean less take-home earnings” for the gig workers, and that the company already has similar policies.
“These recommendations will build on the existing safeguards we have in place for our driver-partners, offered through our driver benefits program,” Gojek told CNBC.
– JP Ong, Sheila Chiang
New Zealand’s central bank discussed hiking by 100 basis points, governor says
The Reserve Bank of New Zealand had considered an even bigger rate hike in making its latest official cash rate decision – despite its move to raise rates by 75 basis points already being its steepest ever.
“I would say we had more discussion around a 75 versus 100 than we had around a 50 versus a 75,” RBNZ Governor Adrian Orr said on CNBC’s “Squawk Box Asia.”
“Now we can say we’re unambiguously contractionary in our monetary position,” Orr said, “We need to be, given the compacity of the economy at present,” he said.
– Jihye Lee
Foxconn says new hires raised pay concerns, adds communication underway
The statement comes after media reported a mass protest of hundreds of workers appeared to be triggered by a delay in bonus payment, with videos circulating on social media showing people smashing surveillance cameras and windows.
“The company has emphasized that the allowance has always been fulfilled based on contractual obligation and will continue to communicate with relevant colleagues,” Foxconn said in its statement, adding that reports of Covid-positive employees residing in the factory’s dormintories is “patently untrue.”
“Regarding any violence, the company will continue to communicate with employees and the government to prevent similar incidents from happening again.”
Taiwan-listed shares of Hon Hai Technology Group, the formal name of Foxconn, traded 0.5% lower in the early Thursday session.
– Jihye Lee
Bank of Korea hikes rates by 25 basis points, meets expectations
The Bank of Korea raised its benchmark interest rate by 25 basis points to 3.25%, a smaller hike than its previous move and widely in line with expectations.
A Reuters poll of economists had expected the move amid signs of slowing domestic growth.
The nation’s inflation rate for October was 5.7%, according to the latest figures released earlier this month – much higher than the central bank’s target of 2%.
BOK Governor Rhee Chang-yong is slated to hold a press conference later in the day on the monetary decision.
– Jihye Lee
CNBC Pro: Asset manager says investors must buy this large-cap stock right now
There’s one large-cap stock that investors must buy into right now, according to Rob Luna, chief investment strategist at asset manager Surevest.
He calls its CEO a “significant visionary.”
While Luna has picked the one large-cap stock, he advised investors generally to reallocate into smaller names, naming two stocks that he called “best in breed.”
— Weizhen Tan
Stocks rise for second day as Wall Street cheers Fed signaling smaller rate hikes ahead
Stocks rose Wednesday and notched the second straight day of gains as investors cheered minutes from the Federal Reserve that signaled a slower pace of interest rate hikes ahead.
The Dow Jones Industrial Average rose 95.96 points, or 0.28%, to 34,194.06. The S&P 500 gained 0.59% to close at 4,027.26 and the Nasdaq Composite increased 0.99% to 11,285.32.
Shares of Nordstrom fell 4.24% after the department store chain reaffirmed its forecast. However, Nordstrom beat profit and sales expectations in its latest results, according to consensus expectations on Refinitiv. Tesla rose 7.82% after Citi upgraded shares to neutral from sell. Deere surged 5.03% on an earnings beat.
CNBC Pro: Betting against a British supermarket, short-seller expects nearly 50% collapse in share price
There’s more pain to come for investors in a British supermarket company if short-seller’s a prediction comes through.
The hedge fund currently holds a bearish bet worth £32.6 million and expects shares in the grocer to fall by 44%.
The fund’s chief investment officer also believes the supermarket will raise fresh capital by diluting shareholders year after year to keep itself afloat in a challenging environment.
— Ganesh Rao
Fed minutes show smaller rate hikes ahead, stocks gain
Stocks rose Wednesday afternoon following the release of minutes from the Federal Reserve’s November meeting. The report showed that the central bank sees progress in its fight to lower inflation and expects to slow the pace of interest rate hikes going forward.
“A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate,” the minutes stated. “The uncertain lags and magnitudes associated with the effects of monetary policy actions on economic activity and inflation were among the reasons cited regarding why such an assessment was important.”
That means that the Fed will likely deliver a smaller rate hike in December and in the early months of 2023.
Markets cheered the news. The Dow Jones Industrial Average rose 130 points, or 0.38%. The S&P 500 gained 0.70% and the Nasdaq Composite increased 1.10%.