KLCI back in positive territory

Sentiment is likely to stay cautious after a poor slate of 4Q18 corporate results were carried over from the downturn in 3Q18

By NG MIN SHEN / Pic By TMR File

MALAYSIA’S benchmark index snapped seven straight days of losses as the FTSE Bursa Malaysia KLCI (FBM KLCI) swung back into the black yesterday on bargain hunting, although the recoup was minimal with investors adopting a cautious stance ahead of global geopolitical movements.

At 5pm yesterday, the FBM KLCI was up 1.2 points or 0.07% at 1,686.82, after bouncing between 1,684.08 and 1,688.33 during the day’s trade.

Previously, the key gauge remained in the red for a week, losing 2.26% over the trading days between Feb 25 and March 5, as per Bloomberg data.

The drag was mainly due to the release of weak fourth quarter of 2018’s (4Q18) earnings among corporates, with many major players falling short of expectations.

“The recovery was likely due to bargain hunting, as investors moved to snap up beaten-down stocks with potential counters such as oil and gas (O&G) and construction,” Rakuten Trade Sdn Bhd research VP Vincent Lau told The Malaysian Reserve.

He noted that January was the only month where Bursa Malaysia saw positive foreign inflows of over RM1 billion, after which foreign investors have been selling down on Malaysian equities.

“The FBM KLCI was mainly down because the recent corporate results were less than inspiring. The interest now is in small- and mid-caps. You can see active stocks like smallcaps and O&G doing well,” Lau added.

Commodities and telecommunications- linked counters — which included Press Metal Aluminium Holdings Bhd, Dialog Group Bhd, Petronas Chemicals Group Bhd, Sime Darby Bhd, Genting Bhd, Axiata Group Bhd, AMMB Holdings Bhd and DiGi.Com Bhd — led the gainers yesterday.

Meanwhile, blue-chip stocks, particularly banks, were among the laggards.

They were RHB Bank Bhd, CIMB Group Holdings Bhd, Public Bank Bhd, Hong Leong Financial Group Bhd, Malaysia Airports Holdings Bhd, IHH Healthcare Bhd, Top Glove Corp Bhd and MISC Bhd.

Malaysian equities also took cues from regional markets, which traded in narrow ranges as investors remained cautious while awaiting updates on the US-China trade negotiations and monetary policies.

The MSCI Asia Pacific Index fell less than 0.05%, while the MSCI Emerging Markets Index rose 0.1% to reach its highest in a week.

The S&P 500 Index saw futures falling 0.2%, as the Stoxx Europe 600 Index lost less than 0.05%. Brent crude oil lost 0.4% to hit US$65.50 (RM267.89) per barrel.

At press time, Japan’s Nikkei 225 fell 0.6%, while South Korea’s Kospi lost 0.17%. Australia’s ASX 200 added 0.64%, but the Australian dollar dipped to a two-month low after the nation’s economic growth slowed significantly in the second half of 2018.

On the other hand, Chinese shares jumped following stimulus measures announced by the government on Tuesday, including infrastructure spending and nearly two trillion yuan (RM1.22 trillion) worth of tax and fee cuts.

The Shanghai Composite climbed 1.57% as at press time, alongside Hong Kong’s Hang Seng Index, which added 0.17%.

The US dollar rose for six straight days as the yield on 10-year US Treasuries stood at 2.71%. This led the ringgit to trade lower against the greenback yesterday, although it gained some on the British pound, which weakened on the possibility of UK Prime Minister Theresa May facing another defeat in Parliament on a revised Brexit deal.

Going forward, investors will look to the European Central Bank’s interest- rate decision and the release of the US jobs report for further guidance, while awaiting cues from Beijing- Washington negotiations.

On the home front, sentiment is likely to stay cautious after a spate of poor 4Q18 corporate performances were carried over from the downturn seen in the 3Q18 amid global market volatility and political uncertainty at home, following the outcome of the 14th General Election.

MALAYSIA’S benchmark index snapped seven straight days of losses as the FTSE Bursa Malaysia KLCI (FBM KLCI) swung back into the black yesterday on bargain hunting, although the recoup was minimal with investors adopting a cautious stance ahead of global geopolitical movements.

At 5pm yesterday, the FBM KLCI was up 1.2 points or 0.07% at 1,686.82, after bouncing between 1,684.08 and 1,688.33 during the day’s trade.

Previously, the key gauge remained in the red for a week, losing 2.26% over the trading days between Feb 25 and March 5, as per Bloomberg data.

The drag was mainly due to the release of weak fourth quarter of 2018’s (4Q18) earnings among corporates, with many major players falling short of expectations.

“The recovery was likely due to bargain hunting, as investors moved to snap up beaten-down stocks with potential counters such as oil and gas (O&G) and construction,” Rakuten Trade Sdn Bhd research VP Vincent Lau told The Malaysian Reserve.

He noted that January was the only month where Bursa Malaysia saw positive foreign inflows of over RM1 billion, after which foreign investors have been selling down on Malaysian equities.

“The FBM KLCI was mainly down because the recent corporate results were less than inspiring. The interest now is in small- and mid-caps. You can see active stocks like smallcaps and O&G doing well,” Lau added.

Commodities and telecommunications- linked counters — which included Press Metal Aluminium Holdings Bhd, Dialog Group Bhd, Petronas Chemicals Group Bhd, Sime Darby Bhd, Genting Bhd, Axiata Group Bhd, AMMB Holdings Bhd and DiGi.Com Bhd — led the gainers yesterday.

Meanwhile, blue-chip stocks, particularly banks, were among the laggards.

They were RHB Bank Bhd, CIMB Group Holdings Bhd, Public Bank Bhd, Hong Leong Financial Group Bhd, Malaysia Airports Holdings Bhd, IHH Healthcare Bhd, Top Glove Corp Bhd and MISC Bhd.

Malaysian equities also took cues from regional markets, which traded in narrow ranges as investors remained cautious while awaiting updates on the US-China trade negotiations and monetary policies.

The MSCI Asia Pacific Index fell less than 0.05%, while the MSCI Emerging Markets Index rose 0.1% to reach its highest in a week.

The S&P 500 Index saw futures falling 0.2%, as the Stoxx Europe 600 Index lost less than 0.05%. Brent crude oil lost 0.4% to hit US$65.50 (RM267.89) per barrel.

At press time, Japan’s Nikkei 225 fell 0.6%, while South Korea’s Kospi lost 0.17%. Australia’s ASX 200 added 0.64%, but the Australian dollar dipped to a two-month low after the nation’s economic growth slowed significantly in the second half of 2018.

On the other hand, Chinese shares jumped following stimulus measures announced by the government on Tuesday, including infrastructure spending and nearly two trillion yuan (RM1.22 trillion) worth of tax and fee cuts.

The Shanghai Composite climbed 1.57% as at press time, alongside Hong Kong’s Hang Seng Index, which added 0.17%.

The US dollar rose for six straight days as the yield on 10-year US Treasuries stood at 2.71%. This led the ringgit to trade lower against the greenback yesterday, although it gained some on the British pound, which weakened on the possibility of UK Prime Minister Theresa May facing another defeat in Parliament on a revised Brexit deal.

Going forward, investors will look to the European Central Bank’s interest- rate decision and the release of the US jobs report for further guidance, while awaiting cues from Beijing- Washington negotiations.

On the home front, sentiment is likely to stay cautious after a spate of poor 4Q18 corporate performances were carried over from the downturn seen in the 3Q18 amid global market volatility and political uncertainty at home, following the outcome of the 14th General Election.