KUALA LUMPUR: Total loans growth accelerated in November, up 4.9 per cent year-on-year (YoY), underpinned by stronger business loans growth (26 per cent YoY) in working capital loans.
Hong Leong Investment Bank (HLIB) research noted that growth was also supported by the steady rise in household loans (5.8 per cent), mainly driven by higher disbursements in non-residential properties and credit cards.
Meanwhile, gross issuance of corporate bonds slowed to RM8.2 billion, mainly owing to lower issuances in finance, insurance, real estate & business services as well as electricity, gas & water.
The household loan-deposit gap widened as monthly growth of household loans outpaced that of household deposits.
On a YoY basis, household loans grew at a steady pace, up by 5.8 per cent YoY, while household deposits eased.
HLIB research added that loan applications slowed pace to seven per cent growth YoY (compared with 29.9 per cent growth YoY in October) amid moderation in both the household and business sectors.
For the household sector, applications for credit cards declined while applications for other purposes moderated. Meanwhile for the business sector, lower applications were observed particularly in transportation & storage, education & health, as well as electricity, gas & air conditioning supply.
Loan approvals recorded a drop of 2.4 per cent, dragged by a decline in approvals in the business sector (-12.1 per cent) and slower approvals in the household sector (10.1 per cent).
Foreigners turned net buyers of local bonds in November, up RM5.1 billion, amid more dovish comments from the US Federal Reserve (Fed) as inflation and employment data came in cooler than expected.
Similarly, foreigners also increased their holdings of Malaysian equities by RM1.4 billion during the month.
"The Fed held interest rates steady in the December Federal Open Market Committee meeting and signalled that inflation had eased faster than anticipated, opening the door to rate cuts next year. "According to projections released, most officials pencilled in three cuts for 2024.
"Consequently, we maintain our projection for ringgit to appreciate to US$/RM4.30 end-2024, after closing 2023 at RM4.59 against the dollar, within our forecast of RM4.60," HLIB said."