Malaysian ringgit extends gains as PM appointment stirs stability hopes

Malaysia's ringgit extended gains and touched a three-month high on Friday following Anwar Ibrahim's appointment as prime minister, which put to rest uncertainty following last week's inconclusive election.

The ringgit USDMYR, which was up for the third straight session, rose 0.8% against the U.S. dollar to its highest level since Aug. 15.

Stocks in Kuala Lumpur BURSA slipped 1.2% after soaring more than 4% in the previous session.

Anwar is expected to start discussions on forming his cabinet on Friday. His appointment ended five days of post-election crisis, but could usher in further instability with his rival, former prime minister Muhyiddin Yassin, challenging him to prove his majority in parliament.

"The next key event to watch for will be the cabinet line-up and resuming parliament to re-table budget 2023," analysts at UOB wrote.

"Without a simple majority, there could be more challenges to push-through key reforms... It remains to be seen if key fiscal measures such as reintroducing a consumption based tax, carbon tax, and targeted subsidies will be implemented amid mounting macro headwinds."

Meanwhile, data showed that Malaysia's consumer price index rose 4% in October from a year earlier, slightly faster than the forecast.

Other regional currencies and equities were mixed as markets continued to digest signals from the U.S. Federal Reserve that hinted at a milder rate of policy tightening ahead.

A majority of officials had agreed it would "likely soon be appropriate" to slow the pace of interest rate hikes, minutes of their latest meeting showed on Wednesday.

The Thai baht USDTHB added 0.6% and was set to post its third consecutive weekly gain. The Singaporean dollar USDSGD and Indian rupee USDINR gained 0.3% and 0.2%, respectively.

Stocks in Indonesia COMPOSITE and Thailand SET lost about 0.6% and 0.4% respectively, however, as risk sentiment remained fragile after China reported another record high of daily COVID-19 infections.

Equities in Singapore STI retreated 0.5% and were set to post their first weekly loss in five.

HIGHLIGHTS

** Malaysia's 10-year benchmark yield is down 7.9 basis points at 4.172%

** Top losers on FTSE Bursa Malaysia Kl Index BURSA include Top Glove Corporation Bhd TOPGLOV and Dialog Group Bhd DIALOG

** Top losers on the Singapore STI STI include Jardine Matheson Holdings Ltd J36 and SATS Ltd S58