LAST_UPDATESat, 21 Jul 2018 4pm

Persistent Selling Drags Bursa Malaysia Lower

KUALA LUMPUR -- Bursa Malaysia extended its downtrend today but closed off its intra-day low, primarily hit by continued foreign selling from the emerging markets.

Inter-Pacific Securities Sdn Bhd Head of Research Pong Teng Siew said the foreign withdrawals across the emerging markets were mainly due to the recent rise of the US dollar and the US Federal Reserve’s interest rate increase, with more hikes expected to take place this year.

At the close, the key FTSE Bursa Malaysia KLCI (FBM KLCI) ended below the psychological level of 1,700, slipping 17.43 points, or 1.01 per cent to finish at 1,692.32, the weakest level seen since Feb 8, 2017 when the index closed at 1,688.50.

The market bellwether opened 0.69 of-a-point better at 1,710.44 from Wednesday's close of 1,709.75 and moved between 1,681.89 and 1,710.71 throughout the day.

Market breadth was negative with losers outpacing gainers 748 to 199, while 357 counters were unchanged, 614 untraded and 35 others suspended.

Turnover stood at 2.12 billion shares worth RM2.67 billion.    

Pong also said that most of the central banks in the emerging markets had decided not to raise their interest rates in their recent monetary policy meetings.

“This also pressured the local currencies, prompting foreign investors to continue pulling out money from the equity markets,” he told Bernama.

On the home front, Pong said as of yesterday, foreign selling from Bursa Malaysia amounted to RM8.9 billion since May 2, 2018.

On the impact from the US-China trade war friction, Pong opined that it would affect the local stock market to a certain degree in line with global equity markets, but stressed that foreign withdrawals from the emerging markets remained the primary factor that pulled down the local market.

 He also dismissed the notion that sellout on the local bourse was due to the shocking government debt level revealed by the Finance Minister Lim Guan Eng.

"It has got nothing to do with that, the selling on Bursa Malaysia was primarily due to the foreign selling in emerging markets including Malaysia, regardless of the size of the debt disclosed by the minister," he said.

Similarly, he did not expect the announcement of RM2.8 billion to be injected by the government to continue with the development of the Tun Razak Exchange (TRX) project would affect the local bourse.

In a press conference earlier today, Lim said the TRX project would be completed despite the additional funding injection of RM2.8 billion and atop the more than RM3 billion in government funds misappropriated from TRX City Sdn Bhd, the master developer of TRX, by 1Malaysia Development Bhd.

Among heavyweights, Telekom fell 49 sen to RM3.14, Tenaga was 32 sen easier at RM13.94, Hong Leong Bank lost 56 sen to RM17.90, Maybank retreated seven sen to RM9.17 and Petronas Dagangan was down 74 sen to RM24.12.  

Of the actives, Sapura Energy trimmed 2.5 sen to 60 sen, YTL Power and YTL Corp reduced four sen each to RM1.02 and RM1.13, respectively, while MyEG was flat at RM1.00 and GSB added half-a-sen to 23.5 sen.

The FBM Emas Index declined 129.60 points to 11,956.89, the FBMT100 Index decreased 123.81 points to 11,745.21, the FBM Emas Shariah Index erased 137.10 points to 12,046.86, the FBM70 was 163.85 points lower at 14,542.56 and the FBM Ace Index gave up 108.50 points to 5,158.45.

Sector-wise, the Finance Index dipped 190.17 points to 16,746.33, the Industrial Index eased 16.80 points to 3,129.58 and the Plantation Index shed 35.07 points to 7,537.58.

Main Market volume rose to 1.34 billion shares worth RM2.53 billion from 1.07 billion shares worth RM2.02 billion on Wednesday.

Warrants volume shrank to 464.35 million units valued at RM102.31 million from 537.41 million units valued at RM143.87 million yesterday.

Volume on the ACE Market advanced to 317.21 million shares worth RM43.59 million against 230.62 million shares worth RM41.90 million previously.    

Consumer products accounted for 54.34 million shares traded on the Main Market, industrial products (176.02 million), construction (103.50 million), trade and services (640.14 million), technology (55.78 million), infrastructure (50.97 million), SPAC (1.11 million), finance (73.82 million), hotels (1.62 million), properties (133.17 million), plantations (46.86 million), mining (17,000), REITs (4.49 million) and closed/fund (13,900).