The Star Malaysia - StarBiz

Malaysian Equity Market

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During the week (Feb 19–25 2021), the FBM KLCI climbed 5.7 points or 0.36% to 1,581.54 pts, bucking the downtrend in both the MSCI Emerging Markets Index (-2.90%) and the Dow Jones Industrial Average (-0.29%).

Globally, investors took comfort in Powell’s statement during the Senate Banking Committee hearing that price pressures were not a threat and easy monetary policy was likely to stay.

They continued to rotate out of technology names on concerns over their high valuations being untenable amidst a rapid rise in US Treasury yields.

This was cushioned by their increased bets on cyclical sectors, particular­ly energy and financial, on reflation trade underpinne­d by the vaccine rollout and fiscal stimulus.

Locally, investors piled into banking stocks while lightening their positions in glove counters for the same reason.

Foreign investors unloaded Rm475.4mil worth of Malaysian equities during the week, pushing the year-to-date cumulative net outflow to Rm1.6bil.

Local institutio­nal and retail investors continued to dominate the market with a participat­ion rate of 44.8% and 39.6% in February respective­ly (comparable with 44.9% and 38.1% in January respective­ly).

Meanwhile, foreign investors piled into Malaysia Government Securities (MGS) for a ninth straight month with a net inflow of Rm2.3bil in January 2021 (vs. Rm2.4bil in December 2020). This was on the heels of a Rm13.4bil net inflow in 2020.

Equity trading activities improved marginally with an average daily value traded (ADVT) of Rm5.1bil in February, (vs. Rm5.0bil in January). Similarly, turnover velocity rose slightly to 70.5% in February (vs. 70.0% in January).

During the week, nine out of 13 sectors in Bursa Malaysia ended in the positive territory.

The best performing sector was Industrial Products and Services Index (+3.6%), riding on recovery optimism.

The worst performing sector was Healthcare (-7.0%) as investors lightened their positions in glove stocks.

In the coming week, investors will keep a close eye on:

> US ISM manufactur­ing PMI (Feb) on March 1;

> Eurozone CPI (Feb) on March 2; > Malaysia interest rate decision on March 4;

> Opec+ 14th meeting on March 4; > US unemployme­nt rate (Feb) on Mar 5.

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