Bursa lower on Trump tariff threat

UNITED States President Donald Trump’s threat to hike tariffs on US$200 billion (RM826 billion) of Chinese goods to speed up ongoing trade talks dragged down Asian equities, including Bursa Malaysia, yesterday.

At 5pm, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) slipped 4.5 points to 1,632.80 from Friday’s close of 1,637.30.

After opening 5.26 points weaker at 1,632.04, the benchmark index moved between 1,623.61 and 1,633.66 throughout the session.

On the broader market, losers beat gainers 790 to 150 with 324 counters unchanged, 641 untraded and 33 others suspended.

Turnover fell to 2.79 billion shares worth RM1.70 billion from 2.82 billion shares worth RM2.11 billion on Friday.

“Trump, who calls himself ‘Tariff Man’, has vowed to increase tariffs on US$200 billion of goods to 25 per cent from 10 per cent, saying the longstanding trade dispute (with China) is progressing at a slow pace.

“As a result, China is considering cancelling the trade talks that are supposed to take place this week,” said a dealer.

“Markets will be left clueless and, hence, we expect cautious trading this week,” he added.

Back home, telecommunications providers Axiata Group Bhd and DiGi. Com Bhd were under the spotlight following plans by Axiata Group Bhd and Norway-based Telenor ASA to combine their Asian operations under a new merged global entity, MergedCo.

Telenor has a 49 per cent stake in Digi.com.

In a filing to Bursa Malaysia, Axiata said both parties would work towards finalising an agreement in the third quarter, which will result in Telenor becoming the majority shareholder of MergedCo with an anticipated 56.5 per cent stake.

This week, investors will also be focusing on the release of the first quarter gross domestic product numbers due on May 16 and Bank Negara Malaysia’s monetary policy announcement today.

Among heavyweights, Maybank rose four sen to RM9.30 and Public Bank increased two sen to RM22.56. Petronas Chemicals dropped 15 sen to RM8.80 while both Axiata and Digi were flat at RM4.04 and RM4.52, respectively.

Shares of Axiata and DiGi were suspended from 9am to 5pm yesterday due to the merger announcement. Trading resumes at 9am today.

Of the actively-traded stocks, Ekovest fell 4.5 sen to 91 sen, Sapura Energy slipped 1.5 sen to 32 sen, Lambo declined half-a-sen to seven sen and Priceworth inched down half-a-sen to nine sen.

The FBM KLCI futures contract on Bursa Malaysia Derivatives closed lower yesterday in tandem with the cash market.

At the close, May 2019 fell 6.50 points to 1,625, June 2019 and September 2019 declined 8.50 points each to 1,624 and 1,622, respectively, while December 2019 was 11 points weaker at 1,619.

Turnover increased to 7,050 lots from 6,018 lots on Friday, while open interest rose to 31,102 lots from 30,202 contracts.