KUALA LUMPUR (Jan 13): The main index at Bursa Malaysia shrugged off movement control order (MCO) jitters and climbed in early trade Wednesday, with gains led by Public Bank Bhd.
At 9.05am, the FBM KLCI rose 14.40 points to 1,626.44.
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The early gainers included Public Bank, KESM Industries Bhd, Malaysian Pacific Industries Bhd, Pharmaniaga Bhd, UWC Bhd, Hong Leong Bank Bhd. Oriental Interest Bhd, Kuala Lumpur Kepong Bhd, Tenaga Nasional Bhd and LTKM Bhd.
Bloomberg said the dollar extended overnight losses and Treasury yields continued their retreat from a 10-month high as traders mulled investor demand for bonds and the prospect of fiscal spending under Joe Biden.
Asian stocks saw a muted start to trading, it said.
Inter-Pacific Research Sdn Bhd said the key index continues to head south with the state of emergency declaration placing a dent to market sentiments, albeit it managed to recoup most of its intraday losses that reached a low of 1,590 points following the Prime Minister’s assurance that the emergency powers is only to tackle the Covid-19 pandemic.
The research house in its daily bulletin today nevertheless said market breadth was positive with many of the lower liners and broader market shares regaining some traction after their recent weakness.
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“We see limited fallout from the MCO and state of emergency as most economic activities are allowed to proceed.
“Nevertheless, the recovery prospects for 1Q2020 is placed under a cloud as it would now be slower even if the impact is relatively benign. Still, we think the recovery is merely delayed as the vaccination that is poised to start in March/April and this could provide some measure of stability for the economy in due course,” it said.
In the interim, it said that Malaysian equities could stage a rebound as there is now more clarity on the MCO and emergency statuses that should provide some calming effects after the recent weakness caused by the heightened uncertainties over the above issues.
“We see the key index regaining the 1,620 level over the near term, with the next hurdle at the 1,633 level. On the downside, the 1,600 psychological level is still the immediate support, followed by the 1,590 level.
“Meanwhile, the lower liners and broader market shares are ahead in their recovery trend – much of it due to their mildly oversold conditions that prompted bargain hunting activities.
“We expect this trend to persist over the near term, helped by the calmer market conditions that should prompt further bargain hunting among the recent big losers,” it said.- The Edge Markets