KL shares mixed at close on profit-taking

Shares on Bursa Malaysia were mixed at the close on Tuesday, as profittaking activities in small cap and financial services stocks took a toll on its performance following the rebound earlier yesterday.

At 5 pm, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) rose 11.68 points or 0.74 per cent to 1,578.08 from Friday’s close of 1,566.40. The index opened 8.63 points higher at 1,575.03 and and hovered between 1,571.30 and 1,585.18 throughout the day.

On the broader market, however, losers thumped gainers 726 to 452, while 415 counters were unchanged, 527 untraded and 12 others suspended.

Total volume fell to 5.92 billion units worth RM4.39 billion from 6.54 billion units worth RM6.37 billion on Friday. The market was closed on Monday for the Federal Territory Day.

Yesterday, the government has announced its decision to extend the Movement Control Order (MCO) 2.0 to Feb 18 in all states except Sarawak.

Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob said the decision was made based on the risk assessments and advice of the Health Ministry after finding that the daily tally of Covid-19 cases in all states remains on an upward trend.

Commenting on the move, Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said that the market has largely priced in the extension of the MCO due to the prolonged high number of cases which reached above 5,000 per day.

“But as we all know, a lot of business sectors have been allowed to operate like construction, manufacturing, services, trade and distribution, agriculture and farming. Nevertheless, there will be an impact on the economic output for the first-quarter gross domestic product (GDP), and we currently have a four per cent GDP growth estimate for 2021 as we have taken into account the possible extension of the MCO,” he told Bernama.

Adam opined that the market may be driven by the retail trading frenzy on Bursa Malaysia, echoing the Gamestop shares movement in the United States (US).

Meanwhile, CGS-CIMB Securities Sdn Bhd analyst Ivy Ng Lee Fang said for the whole month of January, the KLCI fell 3.7 per cent month-on-month (m-o-m) as market sentiments were negatively impacted by the imposition of MCO 2.0, declaration of the state of emergency and the new Covid-19 cases which rose to a record of 5,725 on Jan 29.

“February has historically been a positive month, with the KLCI posting +0.4 per cent +2.2 per cent m-o-m returns over the past years. We expect sentiment to improve when the government starts to roll out the Covid-19 vaccination programme, the increase in new cases ease and the earnings season turns out better than expected,” she said.