The week that was
Stocks enjoy busiest day ever
THE trading volume on Bursa Malaysia reached a new climax on Monday with a record 11.21 billion units of securities changed hands.
The past three days seemed quieter by Monday’s standard, but enough to take May to-date cumulative volume to about 88 billion units.
With a holiday shortened week ahead, it remained to be seen whether the massive 116 billion record volume in April will still hold.
To put things into perspective, April was the first time the monthly volume on Bursa Malaysia had breached the 100 billion unit mark.
Stockbrokers said the bulk of the buying and selling activities in recent weeks were done by a swelling rank of retail investors targeting penny stocks and cheap warrants, flooding the market with quick trades.
A research house tracked that the average value per share traded in the market has fallen from 80 sen pre-movement control order (MCO) to 39 sen on Monday.
Deepening deflationary pressure
THE sharp drop in fuel and electricity prices in April led to the steepest decline in the consumer price index (CPI) since the series began in 1991.
Headline inflation fell 2.9% in April from a year ago, the Statistics Department said on Tuesday. In April, the prices of petrol and diesel fell between 21% and 27% compared with March selling prices.
Food inflation, however, continued to climb (up 1.9% year-on-year and 0.9% higher compared with March) driven by higher grocery prices. This is a reflection of greater consumption at home due to the MCO.
On a month-on-month basis, the CPI in fell 2.7% in April, a sharper drop compared with a 1.2% decline in March.
Core inflation, which strips out much of the price volatility driven by energy prices in April, was stable at 1.3% year-on-year for the third straight month.
March quarter earnings report card revealed more pain in store
THE earnings reporting season shifted into high gear this week, with a slew of big companies releasing their January-march quarterly results.
Most companies said they were affected by the Covid-19 pandemic and the MCO that came into force since March 18.
The real challenge, however, will be in forecasting the rest of the year, given the magnitude of the uncertainty over the economy and operating environment.
Some companies, like fuel retailer Petronas Dagangan Bhd, said they were severely impacted by the extended MCO but see a gradual recovery as more cars got on the road with easing travel restrictions.
Others, like Southern Steel Bhd, it is still figuring out the demand and supply situation in the new normal operating environment.
Quite a number of companies said they were not ready to tell investors what will happen in the coming months amid the disruptions caused by the devastating pandemic.
Good news for palm oil growers
THE government has announced plans to restart the nationwide roll-out of B20 biodiesel in September after a two-month delay due to the MCO.
Upon full implementation, the B20 in transportation and B7 in industrial were estimated to soak up around 1.3 million tonnes of palm oil a year, or almost 7% of 2020 projected crude palm oil production.
The demand side was also boosted news that India is back in the market for Malaysian CPO after a four-month hiatus.
The resumption of purchase came after Malaysia signed a deal last week to buy 100,000 tonnes of Indian rice.
The reported 200,000-tonne order over two months (June and July) from top Indian buyers was higher than total palm oil volume exported to India of 96,000 tonnes in the first four months of 2020.
However, it remained below the average monthly export volume of palm oil from Malaysia to India of 367,000 tonnes per month in 2019.
The latest news is positive as it could help improve Malaysia’s CPO exports to India and keep palm oil stocks in check in the country during the peak production period.