Banking stocks drag down FBM KLCI

KUALA LUMPUR: B ur sa Malaysia’s key index FTSE Bursa Malaysia KLCI (FBM KLCI) slipped into the red yesterday on the back of last-minute selling pressure on selected blue-chips, ahead of the Hari Raya holiday celebrations.

The index was dragged lower by losses in key indexlinked banking stocks.

The big losers included Public Bank Bhd, which fell 1.06 per cent to close at RM24.34, Hong Leong Financial Group Bhd (RM19.12, -2.45 per cent), CIMB Group Holdings Bhd (RM6.21, -1.74 per cent) and Malayan Banking Bhd (RM9.76, -0.41 per cent).

At the close yesterday, the FBM KLCI index shed 2.52 points, or 0.14 per cent, to 1,775.8, after opening 3.9 points easier at 1,774.42, compared with last Friday’s close of 1,778.32.

The index moved between the 1,770.83 and 1,788.16 levels throughout the day.

Sector-wise, the Finance Index fell 121.74 points to 17,756.16, the Industrial Index slipped 8.28 points to 3,193.9 and the Plantation Index rose 77.23 points to 7,738.20.

CIMB Investment Bank Bhd stock analyst Ivy Ng Lee Fang said Bursa Malaysia’s key index was down marginally due to profit-taking activities in the market involving finance-related stocks.

She said the research firm’s year-end forecast of the local bourse would be around 1,767, based on the price/earning ratio of 15.4 times for the Malaysian market.

Ng said the future index performance would depend on the corporate earnings and the country’s economy performance.

“People don’t invest based on daily activities in the market. They invest based on the future earnings prospects as well as companies earnings growth prospects,” she added.

“Improvement in the country’s investment environment will take some time. Investors want to see whether the initiatives by the new government are working.

“They (investors) have to track the flow and want to see results,” she said.

Ng said the government was likely to take time to improve institutional reforms, adding that it would be positive for the stock market in the long-term.

“Foreign investors will be looking at everything, such as returns in various markets. Malaysia will only get the attention if the government’s measures are good for the long-term,” she said.