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KUALA LUMPUR (Sept. 9): A re-sale of rubber glove stocks amid rising hopes for the Covid-19 vaccine dragged the KLCI FBM to a two-month intraday low of 1,494.19 yesterday, although the index The benchmark managed to stay afloat supported by gains in the index components. such as Tenaga Nasional Bhd (TNB) and Malayan Banking Bhd (Maybank).
The KLCI closed 2.94 points or 0.19% higher at 1,519.32 despite remaining in the red for most of the session. The index was also affected by falling crude prices and anticipation of the Bank Negara Malaysia Monetary Policy Committee meeting later this week.
Victor Wan of Inter-Pacific Securities Sdn Bhd said that the consolidation of the KLCI was still ongoing, as market interest continued to decline after the extended rally seen in recent months.
The market experienced a steady uptrend since March, led by the rally among glove makers and companies that make personal protective equipment, with the KLCI hitting a seven-month high of 1,611.42 on July 29, before consolidating. later.
“We are likely to see more of the same trend in the near term, with selling and profit-taking activities continuing, while stocks linked to the index will likely see institutional support to keep the index above the psychological level of 1,500.” Wan told The Borde.
The index was trailed by rubber glove stocks, as Top Glove Corp Bhd and Hartalega Holdings Bhd were among the laggards of the 30 constituent stocks. This was offset by gains at TNB and Maybank.
Two other glove makers, Kossan Rubber Industries Bhd and Supermax Corp Bhd, also saw declines and were among the biggest losers on the stock market yesterday.
The Asia Times reported that three China-made vaccines that were supposedly safe and effective against Covid-19 had made their debut at a local trade fair, the first to be held for domestic and foreign traders in Beijing since the pandemic first broke out. time in the country in late December.
“China National Biotech Group, a subsidiary of state-owned conglomerate China National Pharmaceutical Group Co Ltd, and Nasdaq-listed Sinovac Biotech Ltd, are exhibiting their respective vaccines at the China International Trade in Services Fair in Beijing, which are approaching the end of its final third-stage clinical trials, “the report said.
The publication reported that the three vaccines would be ready to go on the market by the end of the year and that annual production could be increased to 600 million doses, enough to inoculate approximately half of the population of China.
The sale of the rubber glove stocks also came amid reports of a new Covid-19 vaccine from the University of Oxford, which will begin early-stage human trials in Australia.
Areca Capital Sdn Bhd CEO Danny Wong Teck Meng said that it is normal for investors to make a profit at glove counters, especially after substantial gains in recent months.
“When prices keep going up, there will be some profit taking, so [a pullback of] anything between 15% and 20% is healthy.
“As we always look beyond the short term, I am quite in agreement with the fundamentals of glove counters as they are expected to continue to generate good returns in the coming quarters. So fundamentally speaking I will still hold glove stocks.” Wong added.
MIDF Research Director of Research Imran Yassin Md Yusof said: “There is concern of an oversupply of gloves once coronavirus vaccines are activated, which may cause demand to drop from its peak. “.
The bond issues implemented by some glove manufacturers have also boosted the trading liquidity of their shares.
Additionally, the expiration of the credit default at the end of September could also have contributed to the liquidation, as retail investors sought to make a profit to pay off their bank loans, he said.
Declining leader Kossan fell 8.76% or RM1.20 to RM12.50, while Top Glove fell 7.73% or 64 sen to RM7.64, Supermax plunged 6.56% or 59 sen to RM8.41, and Hartalega fell 2.86 % or 40 sen at RM13.60.
The winners were led by Nestlé (Malaysia) Bhd and Petronas Dagangan Bhd.
The Bursa Malaysia Healthcare Index, which includes rubber glove manufacturers, saw the largest drop among industry indices, falling 4% to 3,594.10, followed by the Technology Index (down 2.54%) and the energy index (1.65% less).
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