Bursa falls to 5-month low on debt concern
Analyst sees opportunity to accumulate fundamentally-good stocks
THE FTSE Bursa Malaysia KLCI fell to a new five-month low yesterday amid poor market sentiment over Malaysia’s high debt concern and unfinished political “malaise”.
The benchmark index closed 28.59 points, or 1.58 per cent, lower to 1,775.66.
However, analysts said it was not a bear but rather a poor sentiment-driven market.
Stock market analyst Nazarry Rosli said the fundamentals remained strong and the market offered a good opportunity for investors to buy on the cheap.
“There are a lot of fundamentally-good stocks right now that investors can purchase at bargain hunting level. Some stocks have shown lower price-earnings ratio.
“Therefore, the valuation has become more attractive. It is good time for investors to start accumulating,” he said.
Rakuten Trade head of research Kenny Yee said the market was expected to get better once the geopolitical mood improved.
“I reckon the recent selling, especially by the foreign side, may be due to the uncertainties surrounding the country’s financial state.
“But, I believe the situation will improve over time when market stabilises as the fundamentals remain intact,” he said.
Yee said the market was now oversold and ripe for stock accumulation, especially index-linked counters.
The banking sector suffered the most yesterday, with the Bursa Malaysia Finance Index posting its largest one-day fall since August 2015. It dropped 2.33 per cent to 17,722.89 points, from Wednesday’s close of 18,145.20.
Malayan Banking Bhd was the worst performer with a 3.93 per cent drop, followed by Genting Malaysia Bhd (3.33 per cent), Public Bank Bhd (2.95 per cent), Axiata Group Bhd (2.93 per cent) and CIMB Group Holdings Bhd (2.73 per cent).
Most indices such as small cap, construction, consumer, plantation and properties also ended in red yesterday.