New worries for Bursa Malaysia
PETALING JAYA: Major indexes in the region got off on a jittery start this week with renewed headwinds just days before the world takes a break for the festive season.
Most markets in the region took a beating as investors remained cautious and took profits due to a new “uncontrollable” Covid-19 strain which has sent the United Kingdom into an emergency lockdown that might see other nations following suit.
Not even the US$900bil stimulus package that was struck in the United States Congress managed to lift sentiment as recent developments cast dark clouds over the global economic recovery.
Rakuten Trade Sdn Bhd research vice-president Vincent Lau (pic) said the market was slightly jittery with profit-taking activity due to the rising Covid-19 cases and the uplifting of the temporary suspension of regulated short selling in January.Rakuten Trade Sdn Bhd research vice-president Vincent Lau (pic) said the market was slightly jittery with profit-taking activity due to the rising Covid-19 cases and the uplifting of the temporary suspension of regulated short selling in January.
The negative sentiment was evident in Malaysia as the benchmark FBM KLCI extended the downward pressure for the third consecutive trading day, losing 4.6 points or 0.28% to 1,647.89 points.
UOB Kay Hian head of research Vincent Khoo said it seemed that consolidation was taking place after a window dressing period.
“So much have happened and so many (stocks) have recovered since November and from then on, I would say that the market would generally be trading sideways for now, barring any window-dressing efforts again.
“But the outlook should still be benign in the sense that investors should be positioning for a different start of the year, ” he told StarBiz. Asked if the new Covid-19 strain would have a severe impact on the market, Khoo said the general thinking was that Pfizer, Moderna and companies that have come up with vaccines should be able to address it.
“Of course failing which if we were all wrong, it could send the market into a tailspin again, ” he said.
Rakuten Trade Sdn Bhd research vice-president Vincent Lau (pic) said the market was slightly jittery with profit-taking activity due to the rising Covid-19 cases and the uplifting of the temporary suspension of regulated short selling in January.
“But I think this is a bit overdone. It’s the holiday season and Christmas is approaching where people usually take profit but it’s different this time because nobody can travel overseas.
“Trading activities will still be there, so if you ask me, I think there are buying opportunities, ” he said.
Commenting on the new virus strain and enhanced lockdowns in certain parts of the world, Lau said depending on how these transpires, rubber glove counters may be back in play which will bring vibrancy to Bursa Malaysia again.
Kenanga Research said in its weekly technical review that profit-takers may make their presence felt on the Malaysian bourse as 2020 winds down to a close.
In the absence of fresh catalysts, it added that investors could still be in the mood to lock in their recent gains even after last week’s market slide.
“For those savvy investors who managed to ride on the prevailing market rally, there remain profits to be taken with the FBM KLCI still up 5.7% month-to-date and 13.1% from the trough in early November.
“From a technical perspective, the FBM KLCI could retreat further from an overbought position after last week’s drop, ” the research house said.
Nestle (M) Bhd was the top loser after shedding RM3.50 to RM137.40, dragging the FBM KLCI down by 1.26 points.
Axiata Group Bhd, which lost 13 sen to RM3.74, weighed the index down by a further 1.83 points.
Brent crude oil took a hit amid worries of the new strain, down US$2.43 to US$49.83 per barrel as at press time.
Bursa’s Energy Index was the worst hit among local indices after declining 3.67%, with all component stocks in the red except for Reach Energy Bhd and Dialog Group Bhd.
Market breadth was negative with 848 decliners over 394 gainers while 435 remained unchanged.
Among the most actively traded stocks yesterday were Ageson Bhd, Trive Property Group Bhd and Sapura Energy Bhd.
Top gainers include KESM Industries Bhd which rose 78 sen to RM12.50, UWC Bhd which was up 57 sen to RM10.16 and Heineken Malaysia Bhd, up 38 sen to RM23.28.
Across the region, most major indexes were in the red, led by Thailand’s SET Index which tanked 5.44%, Hong Kong’s Hang Seng Index down 0.72%, Japan’s Nikkei 225 down 0.18% and Singapore’s Straits Times Index down 0.09%.
The Shanghai Composite Index rose 0.76%, followed by Taiwan’s TAIEX and South Korea’s Kospi at 0.95% and 0.23%, respectively.