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KUALA LUMPUR (September 29): The FBM KLCI remained lackluster in the midday break Tuesday as the regional rally lost steam and the World Bank cut Malaysia’s gross domestic product (GDP) growth outlook for 2020.
The World Bank in its Malaysia Specific Macroeconomic Policy Outlook said that after a more pronounced contraction in GDP than expected in the second quarter of this year (2Q20), Malaysia’s growth forecast for 2020 was lowered to a contraction of the Real GDP of 4.9% (down from -3.1%).
He said that this change in forecast reflects increased uncertainty around the start and speed of the global recovery, which would affect investment decisions and external demand.
At 12:30 pm, the FBM KLCI fell 1.32 points to 1,510.34. The index had previously risen to a high of 1,517.33.
The losers outnumbered the winners by 328-293, while 694 counters traded unchanged. The trading volume was 2.74 billion shares valued at RM1.70 billion.
The main losers were Nestlé (M) Bhd, Hartalega Holdings Bhd, Supermax Corp Bhd, Top Glove Corp Bhd, Kossan Rubber Industries Bhd, PPB Group Bhd, SCGM Bhd, Comfort Gloves Bhd, Rubberex Corp Bhd and New Hoong Fatt Holdings Bhd.
Actively traded stocks include XOX Bhd, Kanger International Bhd, Dynaciate Group Bhd, Ihkmas Jaya Group Bhd, Pintaras Jaya Bhd, Priceworth International Bhd, and VS Industry Bhd.
Winners included Scientex Bhd, Malaysian Pacific Industries Bhd, Kuala Lumpur Kepong Bhd, Khind Bhd, Public Bank Bhd, G3 Global Bhd, Greatec Technology Bhd, Poh Huat Resources Bhd, Mi Technovation Bhd, and MCE Holdings Bhd.
Bloomberg said a global rally in equities lost steam in Asia as investors took stock of the latest efforts toward US fiscal stimulus and the rising toll from the pandemic.
The US dollar was losing, he said.
Hong Leong IB Research said the follow-up to a further relief rally on Wall Street and the expectation of further decoration in 3Q20, along with a relief from political uncertainties in Sabah, following GRS’s victory in state elections on 26 September and the appointment of Datuk Hajiji Noor as the 16th Chief Minister. , the KLCI is expected to move towards the 1,525-1,541 zones.
“However, additional earnings are likely to be capped due to persistent uncertainties such as 1) liquidity constraint in the stock market amid the expiration of the six-month grace period for loan repayments on September 30, 2 ) factor Datuk Seri Anwar Ibrahim claimed to have “ formidable and compelling ” support for forming a new government on September 23, and 3) emerging Covid-19 cases and groups in Malaysia (Putrajaya had announced that Lahad Datu, Tawau , Kunak and Semporna in Sabah will be placed under a directed enhanced motion control order, or TEMCO, from September 29 to October 12) and globally (WHO said the world will have to live with Covid-19 for a while and that the official death toll is probably an underestimate of the real total).
“The main supports are set at 1,500-1,490-1,470 zones,” he said.
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