Bursa Malaysia ends at a historic high on strong energy prices, optimism

The FBM KLCI can sustain its trajectory if there are no external shocks, says an expert


The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) closed at a historic high of 1,895 points yesterday with sustained buying by investors on stronger energy prices and market-positive corporate developments.

The index rose by 15.86 points, or 0.8%, backed by investments in oil and gas (O&G) counters, index-linked and renewed interests in consumer stocks.

Inter-Pacific Research Sdn Bhd head of research Pong Teng Siew said investors appear to be going long after holding back in the last three days due to the introduction of the intraday short selling (IDSS) framework.

“It didn’t seem to damage sentiments among retail investors as they are back with interests in the O&G companies that are giving good returns, as a result of the stronger global equity market and the recovery in oil prices,” he told The Malaysian Reserve.

Pong expects the FBM KLCI to rise, but downplays any suggestion of an outright bull market as sectoral performances have been mixed.

“The outlook on the O&G sector seems positive and consumer stocks are back after a lull. However, many sectors are still not participating. The construction segment, despite the huge spending, hasn’t really moved. The same goes for plantations.

“For the property sector, recent reports suggest higher unit sales on the back of more launches of affordable properties.

But it’s not really a positive development because most companies listed are not positioned for lower-range products, so we might see just a temporary boost there,” he said.

Areca Capital Sdn Bhd CEO Danny Wong Teck Meng said the FBM KLCI can sustain its trajectory if there are no unexpected external shocks.

“The rise could be sustained at least for the short term. If it is not for the uncertainty of the upcoming 14th General Election or external factors like the potential for a trade war, I would think this would be a better quarter for corporate earnings,” Wong said.

Market breadth was positive as gainers outplaced losers 504 to 374, with 413 counters unchanged and 620 untraded.

The FBM KLCI futures contract on Bursa Malaysia Derivatives Exchange closed at 1,899.5 points, suggesting that the benchmark index in the cash market is expected to go higher in the days ahead.

Malayan Banking Bhd gained eight sen to RM10.68, PPB Group Bhd added 40 sen to RM19.02 and Petronas Dagangan Bhd (PetDag) bagged six sen to RM18.58.

Shares of Tenaga Nasional Bhd also rose eight sen to RM16, while CIMB Group Holdings Bhd rose one sen to RM7.31.

Investors also bought into consumer counters like British American Tobacco (M) Bhd, Fraser & Neave Holdings Bhd, PetDag and Heineken Malaysia Bhd.