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FBM KLCI ends weaker on broad selloff
Published on: Tuesday, May 14, 2019

KUALA LUMPUR: Bursa Malaysia suffered a broad decline on Monday amid worries over the weak first-quarter earnings season and liquidity as well as the escalation in the US-China trade war.

At 5pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) tumbled to its lowest since June 2016 to 1,601.09, a drop of 9.18 points against last Friday’s close of 1,610.27. 

The benchmark index, which opened at 1,610.55, moved between a low of 1,598.60 and a high of 1,611.47 during the day. 

Losers outnumbered gainers 815 to 140 with 260 counters unchanged, 694 untraded and 24 others suspended.

Turnover increased to 2.48 billion shares worth RM1.65 billion from 2.29 billion shares valued at RM1.84 billion recorded last Friday.

Inter-Pacific Securities Sdn Bhd Head of Research Pong Teng Siew said the “bad” combination of weak domestic liquidity and corporate earnings would continue to hinder foreign investors from participating in the market.

“If you have a strong profit performance and weak liquidity, the stock market can still to climb as the foreign funds would recognise that the fundamentals are strong, but now we have generally weak corporate earnings and liquidity, so there is no incentive for them to come in,” he told Bernama.

Hence, he expects the next support level to be at 1,587 following the break below 1,600 on Monday.

Bank Islam Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said investors would remain cautious on their investment strategy in the immediate term as they awaited data on the first-quarter Gross Domestic Product, which was also likely to record slower growth.

“We have an ongoing trade war whereby we are still uncertain whether China would retaliate on the latest move by the US and whether it would include non-tariff measures such as currency devaluation or selling off their US Treasury bond holdings,” he said.

The US and China ended their trade negotiations without a deal last week, piling more uncertainties on global trade.

In addition, the US also raised tariffs on US$200 billion worth of Chinese goods to 25 per cent from 10 per cent on Friday.

Mohd Afzanizam said foreign investors continued to be net sellers with net sales amounting to RM450.9 million last week.

“This represents seven consecutive weeks of net sales registered by the foreign investors,” he said, adding that the FBM KLCI would continue to hover around the current level in the immediate term.

Among the heavyweights, Maybank rose one sen to RM8.98 and Public Bank added six sen to RM22.32 while Petronas Chemicals was five sen lower at RM8.84.

Of the actively-traded stocks, Bumi Armada and Lambo declined one sen each to 19 sen and seven sen, respectively, while Sapura Energy lost half-a-sen to 31 sen.

The FBM Emas Index declined 100.42 points to 11,274.54, the FBMT 100 dipped 89.50 points to 11,115.55 and the FBM 70 lost 216.18 points to 13,862.87.

The FBM Emas Shariah Index erased 141.33 points to 11,409.10 and the FBM Ace Index was down 113.97 points to 4,418.60.

Sector-wise, the Financial Services Index dropped 49.45 points to 16,516.73, the Plantation Index fell 35.87 points to 7,014.41 and the Industrial Products and Services Index was 1.91 points lower at 164.77.

Main Market volume rose to 1.56 billion shares valued at RM1.57 billion from 1.48 billion shares valued at RM1.67 billion recorded last Friday.

Warrants turnover decreased to 181.85 million units worth RM22.63 million versus 439.87 million units worth RM122.21 million.

Volume on the ACE Market increased to 740 million shares valued at RM57.29 million from 366.31 million shares valued at RM49.46 million, previously.

Consumer products and services accounted for 249.08 million shares traded on the Main Market, industrial products and services (231.72 million), construction (218.47 million), technology (119.23 million), SPAC (nil), financial services (50.93 million), property (121.37 million), plantation (29.89 million), REITs (8.72 million), closed/fund (16,000), energy (425.85 million), healthcare (26.07 million), telecommunications and media (37.88 million), transportation and logistics (16.65 million) and utilities (24.13 million). – Bernama



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