Bursa Malaysia ends weaker on broad sell-off

KUALA LUMPUR: Bursa Malaysia suffered a broad decline yesterday amid worries over the weak first-quarter earnings season and liquidity as well as the escalation in the US-China trade war.

At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) tumbled to its lowest since June 2016 to 1,601.09, a drop of 9.18 points against last Friday’s close of 1,610.27.

The benchmark index, which opened at 1,610.55, moved between a low of 1,598.60 and a high of 1,611.47 during the day.

Losers outnumbered gainers 815 to 140 with 260 counters unchanged, 694 untraded and 24 others suspended.

Turnover increased to 2.48 billion shares worth RM1.65 billion from 2.29 billion shares valued at RM1.84 billion recorded last Friday.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew said the “bad” combination of weak domestic liquidity and corporate earnings would continue to hinder foreign investors from participating in the market.

“If you have a strong profit performance and weak liquidity, the stock market can still to climb as the foreign funds would recognise that the fundamentals are strong, but now we have generally weak corporate earnings and liquidity, so there is no incentive for them to come in,” he told Bernama.

Hence, he expects the next support level to be at 1,587 following the break below 1,600 today.

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said investors would remain cautious on their investment strategy in the immediate term as they awaited data on the first-quarter Gross Domestic Product, which was also likely to record slower growth.

“We have an ongoing trade war whereby we are still uncertain whether China would retaliate on the latest move by the US and whether it would include nontariff measures such as currency devaluation or selling off their US Treasury bond holdings,” he said.

The US and China ended their trade negotiations without a deal last week, piling more uncertainties on global trade.

In addition, the US also raised tariffs on US$200 billion worth of Chinese goods to 25 per cent from 10 per cent on Friday.

Mohd Afzanizam said foreign investors continued to be net sellers with net sales amounting to RM450.9 million last week.

“This represents seven consecutive weeks of net sales registered by the foreign investors,” he said, adding that the FBM KLCI would continue to hover around the current level in the immediate term.

Among the heavyweights, Maybank rose one sen to RM8.98 and Public Bank added six sen to RM22.32 while Petronas Chemicals was five sen lower at RM8.84.