Ringgit Moves and Bursa Sectors: An Investor Guide
The short answer
Bank Negara Malaysia publishes official ringgit rates from the interbank market in Kuala Lumpur [1]. To judge how a ringgit move affects a Bursa company, check which currency its revenue and costs are in, using the annual report notes, then separate forex gains and losses from operating profit. Exporters and importers can be affected in opposite directions.
Where can I see official ringgit rates?
Bank Negara Malaysia publishes an exchange rate table on its website, built from the interbank foreign exchange market in Kuala Lumpur at 0900, 1200 and 1700 [1]. A fourth session at 1130 uses counter rates offered by selected commercial banks [1].
The table offers middle, buying and selling rates, and can be shown as ringgit per unit of foreign currency or the reverse [1]. It includes around 27 currency codes and a CSV export for building your own history [1]. Not every currency or rate type is available in every session [1].
Quotation direction matters. “Ringgit per US dollar” rising means the ringgit has weakened; a falling figure means it has strengthened. Check the direction before comparing any two numbers.
Which Bursa sectors earn in US dollars?
Sectors that sell to overseas customers often invoice in US dollars, while their local costs, such as wages and utilities, are paid in ringgit. Glove makers, semiconductor-related firms and plantation companies are commonly discussed as having some foreign-currency exposure.
That is a starting hypothesis, not a conclusion. Two companies in the same sector can differ widely: one may sell in ringgit through local distributors, another may bill in dollars and buy materials in dollars too. Our sector pages on gloves, semiconductors and plantation cover other drivers; this article is about the currency channel only.
| Type of business | Revenue currency | Cost currency |
|---|---|---|
| Exporter | Mostly foreign | Mostly ringgit |
| Importer | Mostly ringgit | Mostly foreign |
| Natural hedge | Foreign | Foreign |
A “natural hedge” means income and costs are in the same currency, so a rate move largely cancels out.
How do I find a company’s currency exposure in its report?
You find it in the notes to the accounts and the segment disclosures, not in the headline numbers. Reviewing annual and quarterly reports to learn who the company’s customers are is a standard starting point for research [2].
Work through these steps:
- Read the accounting policies note for the company’s functional currency, the currency of the primary economic environment in which it operates; any other currency is a foreign currency under the accounting standard [3].
- Find the revenue breakdown by geography or customer location.
- Look for a financial risk management note that gives the split of borrowings, receivables and payables by currency.
- Check whether the company uses forward contracts to lock in rates.
- Note whether subsidiaries report in other currencies, which creates translation effects when their accounts are consolidated.
The accounting standard also covers how an entity translates its financial statements into a presentation currency if that differs from its functional currency [3]. This is why a group with foreign subsidiaries can show currency effects even if no cash has moved.
What is a forex gain or loss in the income statement?
A forex gain or loss is the difference that arises when a foreign-currency item is settled or re-measured at a different rate from the one used to record it. Typical examples are a dollar receivable or a dollar loan.
The notes usually separate realised items, where cash has actually changed hands, from unrealised items, where a balance is simply re-valued at the reporting date. Translation differences from consolidating foreign subsidiaries are generally handled differently from transaction gains, so read the note rather than assuming.
Hypothetical illustration: Company A reports a profit before tax of RM80 million, of which RM12 million is an unrealised forex gain on a dollar deposit. In the illustration, without that gain the result is RM68 million, so the headline looks about 18 per cent better than the underlying business. Reading the notes before relying on the headline protects you from paying for a gain that may reverse.
Why treat translation gains as one-offs?
Translation and revaluation gains should be treated cautiously because they can reverse when the rate moves back. They reflect a change in how a balance is measured, not repeatable business performance.
When you value a company on earnings, use a profit figure that removes these items, or at least test it both ways. Our guide to reading an income statement shows where “other income” and “other expenses” sit, which is usually where these items appear.
Do not extrapolate. A company that benefited from a weaker ringgit in one period has not earned a permanent advantage. This article does not forecast the ringgit, and no approach can turn a currency view into a reliable rule. A better habit is to record, for each company you follow, the currencies of its revenue, costs and debt, and to revisit that record when the annual report changes it.
Frequently asked questions
Does Bank Negara publish a single official ringgit rate?
It publishes middle, buying and selling rates for several sessions each day, so you should state which session and rate type you are using [1].
Is a weaker ringgit good for every exporter?
No. If the exporter also buys materials or services in foreign currency, the benefit may be partly or fully cancelled out.
Where do forex gains appear in a quarterly report?
They normally appear within other income or other expenses, and the notes explain whether they were realised or unrealised.
Can Finworld predict where the ringgit will go?
No. Finworld does not forecast currencies; it explains how to read the published reports.
Sources
- Bank Negara Malaysia — exchange rate table, interbank market sessions, rate types, quotation direction, CSV export
- InvestSmart (Securities Commission Malaysia) — reviewing annual and quarterly reports to learn a company’s customers and business
- IFRS Foundation — IAS 21 functional currency, foreign currency, translation into a presentation currency
See how Finworld organises Bursa Malaysia research
Disclaimer: Finworld provides market education and research tools only. This is not investment advice. Market data is end-of-day.