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KUALA LUMPUR (Nov 30): Four banks plummeted in the final 30 minutes before the closing bell and dragged the FBM KLCI down by almost 45 points.
The four banks that came under pressure were Malayan Banking Bhd (Maybank), Public Bank Bhd, CIMB Group Holdings Bhd and Hong Leong Bank Bhd.
In addition to the earnings contraction, analysts and fund managers contacted by The Edge link the sale to the act of rebalancing portfolios as a result of MSCI having less weight in the Asean markets.
As the closing bell rang, Public Bank led the fall. He was the third highest value loser in Bursa Malaysia today. It lost 6.45% or RM1.20 to RM17.40, giving it a market value of RM67.55 billion. Its trading volume was 32.87 million shares.
The country’s largest bank, Maybank, fell 4.7% or 39 sen to RM7.90, making it the eighth biggest loser today. Its market capitalization dropped to RM 88.81 billion after 17.45 million shares changed hands.
At CIMB Group, which previously led the drop in the morning session, it lost 5.22% or 20 sen to RM3.63, translating into a market capitalization of RM36.02 billion.
Hong Leong Bank saw most of its previous 6.35% gain in the last 30 minutes evaporate. It fell from an intraday high of RM 18.10 to close at RM 17.18, up 0.94% or 16 sen. Its market capitalization stood at RM37.24 billion.
Affin Bank Bhd was also down 2.5% or four sen at RM1.56.
The financial services index, which counts banks as constituents, declined the most among the indices present in Bursa Malaysia. The index was down 3.22% or 458.89 points to 13,804.21 points.
Malacca Securities head of research Loui Low attributed the sale of the bank shares to the rebalancing carried out by MSCI.
He also noted that the selling pressure was also a reaction to the lower results seen by some banks.
“Could be [because of the lower earnings]As the entire banking sector was selling, therefore it will be sold according to its weighting, “Low said.
A banking analyst said that the sharp decline in the FBM KLCI, as well as some blue stocks, was due to the rebalancing of the MSCI. A similar trend was observed in other markets as well.
He noted that the rebalancing of the portfolio over the years has further reduced the weight of ASEAN and Malaysia.
One fund manager agreed that the MSCI rebalancing was the likely reason for the decline, but noted that, when it comes to bank earnings, there were no big unpleasant surprises.
However, not all banks fell today.
Hong Leong Financial Group Bhd was the ninth winner on the local exchange. It gained 1.86% or 30 sen to RM16.40, with a market capitalization of RM18.82 billion.
Meanwhile, Alliance Bank Malaysia Bhd posted a one-minute gain, rising 1.94% or five sen to RM2.63. RHB Bank Bhd closed unchanged at RM5.15.
The FBM KLCI closed 2.79% or 44.88 points lower at 1,562.71 points, led mainly by Public Bank, Petronas Chemicals Group Bhd and Tenaga Nasional Bhd.
Benchmarks in the region were in a red sea. Indonesia’s Jakarta composite fell the most by 2.96%, followed by Thailand as a whole (-2.05%), Hong Kong’s Hang Seng (-2.06%), the Straits Times of Singapore (-1.75%), the Kospi of South Korea (-1.6%), the Nikkei of Japan. 225 (-0.79%) and China’s Shanghai Composite (-0.49%).
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