FBM KLCI back to pre-covid-19 level

Index powers to 1,561.84, recovers from all of its virus-linked losses

PETALING JAYA: The benchmark FBM KLCI has recovered from all of its Covid-19 pandemic linked losses, despite the economy not yet fully recovering as most people still choose to stay home.

The index closed at 1,561.84 yesterday, gaining 23.31 points or 1.52% racking up its sixth day of consecutive gains.

At this point, the FBM KLCI is at the level that it once was on Feb 20, prior to when the Covid-19 blew up in Malaysia and about a month before the movement control order (MCO) was announced on March 18.

Rakuten vice-president of equity research Vincent Lau said: “The market has continued to hold up well because it is a forward looking indicator of the economy.

“There is the added anticipation of the announcement by the government on Friday of a short-term economic recovery plan.

“The Dow Jones in the US has continued to rise while oil prices have now stabilised.”

“In the recent few days, trading activity appeared to be focused on the rubber glove and banking stocks.

“The GDP figures will not be so good but that is a fact that is known. There is also a certain level of fear of missing out that’s driving this market as well,” he added.

Lau told Starbiz that that there was notably an increase in retail participation in the market and noted that statistics indicate most trading activity on the local market is attributed to retailers and local institutions.

In yesterday’s trade, Bursa Malaysia saw 8.19 billion shares worth Rm6.12bil changing hands. Market breadth was positive with 634 gaining counters compared with 389 losers and 424 counters were unchanged.

The bourse’s top performing industries yesterday were from the Bursa Malaysia Healthcare Index (+5.85%), Financial Services Index (+2.07%) and Industrial Products & Services Index (+5.16%).

Glove makers staged a recovery in yesterday’s trade with Supermax Corp Bhd rising RM1.06 to RM8.20, Rubberex Corp (M) Bhd gaining 78 sen to RM3.71, Top Glove Corp Bhd adding 74 sen to RM15.44 and Comfort Gloves Bhd climbing 70 sen to RM3.67.

The FBM KLCI linked banks saw sizeable gains with Malayan Banking Bhd rising 21 sen to RM8.19 and RHB Bank Bhd adding 15 sen to RM5.50.

Among the notable top active stocks on the bourse were Sapura Energy Bhd that rose 0.5 sen to 10.5 sen and Airasia Group Bhd which added 3.5 sen to 86 sen.

Socio-economic Research Centre executive director and economist Lee Heng Guie told Starbiz that their channel checks indicate that the economy is still moving quite slow at the moment.

He said some sectors are still struggling and cash flow is still the concern of the day.

“With weaker consumer demand, employees are also concerned about the weaker employment prospects and are bracing for more job losses,” Lee said.

“About slightly less than half of the workforce are still working from home and while shopping malls tenants of 80-90% have already reopened, not all stores are opened fully as some choose to close early by 7pm to save on costs,” he added.

“The market has continued to hold up well because it is a forward looking indicator of the economy.”

Vincent Lau