The Ringgit, which has strengthened more than 6% year to date against US dollar, is poised to make further gain. The current strength has helped selected “ringgit-play” stocks to emerge.
However, “ringgit-play” stocks may only short term phenomenon. The stocks that gain the most with strong ringgit is the the companies that imports a lot of raw materials in foreign currency. The companies that depend on export may be turn out to be a loser.
The table below shows sectors and stocks that benefit from stronger ringgit.
|Plantation||Kuala Lumpur Kepong|
|Steel||Malaysia Steel Works|
The main sector that will become losers with strong ringgit are Electrical and Electronics Exporters and Rubber Glove makers.
Source : OSK Research & UOB KayHian