SINGAPORE: The ringgit led a slide among emerging Asian currencies on Wednesday, staying weaker than a technical support level on dollar demand from Malaysian state companies after their purchases of foreign assets.
The country's state investment arm Khazanah Nasional said on Friday it had bought an 8.9 percent stake in Sri Lankan conglomerate John Keells Holdings (JKH) for 366 million ringgit ($118.73 million) to diversify its portfolio.
Malaysia's Permodalan Nasional Berhad reportedly bought landmark London offices for 500 million sterling ($792.74 million), IFR Markets said.
Dollar bids related to those deals caused interbank speculators to cover short positions in the US currency, forcing the ringgit on late Tuesday to weaken past a 200-day moving average, which currently stands at 3.0734 per dollar.
With the break of the support, it is expected to head to 3.0949, the 50 percent Fibonacci retracement of its December-February appreciation. It also has the top of daily Ichimoku cloud around 3.0970.
Some dealers suspected demand of the Singapore dollar versus the ringgit.
But market players looked to buy the Malaysian currency, saying dollar purchases linked to the acquisitions appeared to have been completed.
"Dollar/ringgit may go to 3.1000, but I am looking to sell it here. A lot of offers are lined up around 3.0870," said a senior Malaysian bank dealer in Kuala Lumpur.
"Investors covered short positions to sell but I don't believe they would go long. Unless the USD/SGD flies to 1.2800, I won't buy (dollar/ringgit)," he added.
The Singapore dollar outperformed its Asian peers with a slight gain helped by demand from hedge funds and interbank speculators.
But most emerging Asian currencies slid with the South Korean won down on demand from importers and as some offshore funds joined dollar demand.
The dollar eased slightly, but it is seen staying firm on the improving US economic outlook.
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