Expect Interest Rates to riSE

Earlier, Malaysia's central bank, Bank Negara said annual inflation probably topped 6 per cent in June. Today, in an interview by Reuters, Malaysia's Second Finance Minister Nor Mohamed Yakcop said that "Inflation for the months of June and July... will be slightly high, maybe 7 per cent or so, or even higher".

To cushion his rather "market un-friendly" remark he mentioned that "For the year as a whole it will be contained. My own expectation is not more 5 per cent". Yeah right...

Just be prepared for the stock market to weaken further when interest rates rise. Major indices today closed higher between 2.5 to 3.5 per cent except Malaysia and Japan. The Malaysia benchmark KL Composite Index closed 1.56 points or 0.14% lower.

The weather has been gloomy these days... storms has yet to come...