Investors cherry-pick stocks in bearish market conditions

Stocks linked to political figures are in play with investors


THE prospects of weaker growth and political risk saw nervous investors remain in a risk-off leading the local bourse’s benchmark FBM KLCI to its lowest since December 2011.

One day after the swearing-in of Malaysia’s eighth prime minister, the local benchmark index fell 15.7 points to close at 1,466.94 points, after hitting an intraday low of 1,456.08 thus dragging the FTSE Bursa Malaysia KLCI (FBM KLCI) 135.56 points lower year-to-date (YTD).

Stocks continue to plunge over escalating fears of the coronavirus spread and the damage it could inflict on global economies.

Across Bursa Malaysia yesterday, 4.28 billion shares worth RM3.26 billion were traded.

Stocks linked to political figures were in play with investors. Active stocks included Eden Inc Bhd and Thriven Global Bhd with some 205 million and 69.6 million shares traded.

Thriven Global rose 43% sen to 31.5 sen while Eden closed at 27 sen, a 38% increase. Both stocks are linked to Prime Minister Tan Sri Muhyiddin Yassin’s son, Datuk Fakhri Yassin Mahiaddin.

In a research note yesterday, Affin Hwang Capital Research said stocks such as Eden and Thriven Global could see higher investor interests.

“Umno and MCA-related counters could also be in favour — media companies Media Prima and The Star come to mind,” it added.

Stocks linked to Datuk Seri Anwar Ibrahim, were on a downtrend. MUI Properties Bhd, Malayan United Industries Bhd (MUI Group),

Pan Malaysia Holdings Bhd and Advance Synergy Bhd fell by 5%, 5.6%, 22.5% and 29% respectively.

According to their respective websites, MUI Properties and Pan Malaysia are both members of MUI Group, whose board members include Datuk Farizon Ibrahim. Farizon, who is Anwar’s younger sister, sits on the board of Pan Malaysia.

The overall market capitalisation of blue-chip stocks also reduced below a trillion-level, totalling to RM956.1 billion at close yesterday.

TA Securities Holdings Bhd said following the more bearish technical signals flashed by trend and momentum indicators for the KLCI following last week’s sharp selloff, further downward correction can be expected this week.

“On the global front, increasing fears that a developing Covid-19 pandemic may trigger a global economic recession should spillover to further dampen local market sentiment,” it said in a note yesterday.

The index is down 13.7% year-on-year (YoY) while the MSCI AC Asia Pacific Index lost 2.18% in the same period.

According to Bloomberg data, the FBM KLCI is trading at a price-to-earnings ratio of 16.4 on a trailing basis and 15 times estimated earnings of its members for the coming year.

The index’s dividend yield is 3.79% on a trailing 12-month basis. The market also saw an exodus of foreign investors last week.

MIDF Investment Bank Bhd’s analyst Adam Mohamed Rahim said foreign investors took out a whopping RM1.26 billion net of local equities, the largest weekly foreign net outflow in 88 weeks.

“The month of February saw a foreign net outflow of RM1.97 billion — the largest monthly foreign net outflow since August 2019, which saw international funds taking out RM2.6 billion.

“On a YTD basis, the foreign net outflow from Malaysia stood at RM2.11 billion, the third smallest among the seven Asian markets (South Korea, Thailand, Indonesia, the Philippines, India, Taiwan and Malaysia) under our coverage,” he added.

In terms of participation, the average daily traded value of foreign investors surged the most by 100% for the week to reach a healthy level of RM1.93 billion.