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KUALA LUMPUR (September 9): The KLCI FBM closed down 22.6 points or 1.49% at 1,496.72 today, the first close below 1,500 since June 29 this year, as the broader market fell amid a confluence of factors including lower oil prices today and expectations. of Bank Negara Malaysia’s (BNM) overnight policy rate (OPR) decision tomorrow.
Fund managers said today that the Malaysian stock market was also inspired by the anticipation of the Malaysia Budget for 2021, which is scheduled to be announced on November 6, and the US presidential elections, which will take place. On November 3.
“Investors are likely to take a wait-and-see stance to see if several major events will be announced in the coming months. There is a possible cut in the OPR coming tomorrow and if there is no cut it will likely be in November.
“There is also the announcement of the (Malaysia) 2021 budget in November, along with external factors including the US (presidential) election,” Areca Capital Sdn Bhd CEO Danny Wong Teck Meng told theedgemarkets. com today.
In Bursa Malaysia at 5pm today, 7.7 billion securities valued at RM4.89 billion were traded.
Those who declined outnumbered the winners at 846 to 314 respectively.
On June 29 of this year, the KLCI closed at 1,494.43 points.
Across Bursa today, the KLCI decline followed the 4.9% drop in the healthcare index as investors sold shares of rubber glove makers including Kossan Rubber Industries Bhd, Supermax Corp Bhd, Hartalega Holdings Bhd and Top Glove Corp Bhd.
Manufacturers of rubber gloves are part of the sanitary index, which includes hospital operators and pharmaceutical companies.
Hartalega and Top Glove are also components of the 30-share KLCI.
Hartalega’s share price closed down 60 sen or 4.41% at RM 13, while Top Glove fell 49 sen or 6.41% at RM 7.15.
Wong said the drop in glove makers’ share prices marks a “healthy correction” and may open up some buying opportunities in these stocks.
Rubber glove makers’ stock prices have fallen due to profit-taking after rising substantially on the expectation that the Covid-19 pandemic will lead to increased demand for gloves to slow the spread of the pandemic.
Meanwhile, Bursa’s main winner was Gets Global Bhd after it closed up 26.5 sen or 39.85% at 93 sen.
The main active stock was XOX Bhd, which registered the trading of some 467 million shares. XOX’s stock price ended three sen or 13.04% down at 20 sen.
BNM’s OPR decision will be watched closely as investors weigh the impact of the central bank’s monetary policy on the broader asset market, including stocks, bonds, currencies and real estate.
In a statement on July 7, 2020, BNM said that its Monetary Policy Committee had decided to reduce the OPR by 25 basis points to 1.75%.
On August 31, 2020, DBS Group senior economist Irvin Seah and strategist Duncan Tan wrote in a note that BNM had cut the OPR by a total of 125 basis points so far this year to 1.75% to supplement similarly robust fiscal measures aimed at cushioning Malaysia’s economy from the impact of the Covid-19 pandemic.
Globally today, it was reported that Asian stocks fell on Wednesday and crude oil prices hit lows not seen since June after a slide in tech stocks sank Wall Street for the third day in a row and a major drugmaker delayed testing. of a coronavirus vaccine.
Oil futures were reported to tumble again on Wednesday after a sharp drop in the previous session, as a rebound in Covid-19 cases in some countries undermined hopes for a steady recovery in global demand.
“Brent crude fell 19 cents, or 0.5%, to $ 39.59 a barrel at 0656 GMT after falling more than 5% on Tuesday to fall below $ 40 a barrel for the first time since June. US crude fell 24 cents, or 0.7%, to US $ 36.52 a barrel, having fallen almost 8% in the previous session.
“The two major oil benchmarks are trading at about three-month lows. The global health crisis continues to erupt unabated with rising coronavirus cases in India, Britain, Spain, and various parts of the United States. Outbreaks threaten to slow a global economic crisis recovery and reduce demand for fuels from aviation gas to diesel. Reuters reported.
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