POSITIVE SENTIMENT
LISTED export companies are continuing their impressive start to the year on sustained global trade growth. Analysts also see further boost to their revenues and returns despite the strengthening ringgit.
EXPORT-oriented companies listed on the local bourse are continuing their impressive start to the year with solid share price performance, unfazed by the ringgit’s strong run.
Consumer companies, whose bottom lines are also very much affected by a stronger ringgit, followed the trend to trade higher yesterday on positive market sentiment.
The reason for the performance was clear, in which global trade growth was larger than the ringgit’s rise, said analysts.
The ringgit has so far risen 13.19 per cent to RM3.904 against the US dollar, from its all-time low of RM4.4975 on January 14 last year.
“Exports are growing and expected to drive up revenues and higher returns,” said MIDF head of research Mohd Redza Abdul Rahman.
He expects global growth to stay solid this year and further boost Malaysia’s export performance.
The World Trade Organisation’s (WTO) recent World Trade Outlook Indicator (WTOI) suggested solid trade volume growth would likely continue and remain above trend in the coming months.
“The WTOI has recorded readings of 102 or higher since February 2017, which coincided with a strengthening of global trade flows,” said WTO.
Readings of 100 indicate growth in line with medium-term trends, above 100 suggests above trend growth and below 100 the reverse.
On Bursa Malaysia, other than oil and gas companies whose share prices rose on higher oil price, and companies with growing corporate earnings, buying interests continued for export companies, two days after the long Chinese New Year holiday weekend.
Globetronics Technology Bhd closed higher at RM6.29, giving the company a return of 43.28 per cent in the last 12 months. Inari Amertron Bhd closed at RM3.49 and gave a 12-month return of 86.63 per cent.
Other exporters such as Scientex Bhd, VS Industry Bhd, Top Glove Bhd, Hartalega Holdings Bhd, IOI Corp Bhd, Sime Darby Plantation Bhd and Felda Global Ventures Holdings Bhd (FGV) ended higher yesterday compared with Monday’s closing.
Scientex gave a 12-month return of 18.14 per cent, VS Industry (86.24 per cent), Top Glove (86.99 per cent), Hartalega (148.32 per cent), IOI Corp (2.59 per cent), Sime Darby Plantation (10.78 per cent) and FGV (13.41 per cent).
Consumer companies such as Nestle (M) Bhd and Fraser & Neave Holdings Bhd also closed higher to RM121.50 and RM30 from Monday’s close of RM120.40 and RM29.98, respectively.
Most furniture companies also rose with Homeritz Corp Bhd, Lii Hen Industries Bhd, Latitude Tree Holdings Bhd and Poh Huat Resources Bhd and HeveaBoard Bhd ending in the positive territory.
Stock market expert Nazarry Rosli said solid global trade performance would help export companies to sustain potential earnings in the future, therefore encouraging investors to continue buying their shares.