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Malaysian market wrap: Banks drive indexes higher for seventh session, ringgit slips
KUALA LUMPUR (NewsRise) — Malaysian shares ended slightly higher Tuesday, rising for the seventh session in a row, its longest winning streak this year, but ringgit fell as oil took a breather after its recent rally.
The nation’s benchmark FTSE Bursa Malaysia KLCI traded in a very narrow range to end 0.07% higher at 1,711.14 points, outperforming most Southeast Asian markets. The index has gained 5.55% so far in October.
Malayan Banking and Public Bank, the two highest weighted stocks with a combined weighting of 21% in KLCI, were the primary drivers for KLCI’s gain. However, Tenaga Nasional and Genting fell on profit-taking.
“The markets are remaining supported in the very near-term on account of government measures,” said Lim Teck Seng, Deputy Managing Director at JF Apex Securities. “We believe that the market provides substantial value for investors having a long term time horizon of four to five years. However, in the next few months, developments in the domestic political space, China growth outlook and Federal Reserve stance on interest rates will be the major drivers for our markets.”
The markets will be closed tomorrow for an Islamic festival.
Outside the benchmark index, highway concessionaries were in focus after announcement of a hike in toll rates along several major highways effective Thursday. Silk Holdings rose 1.85% to 12.8 ringgit and Litrak gained 1.96% to 5.2 ringgit
Fourteen of 30 constituents in the index ended higher, while overall advancing issues outnumbered declining ones 433 to 414, and 1,000 closed unchanged.
The ringgit fell 0.99% to 4.1770 against 4.1360 yesterday, its biggest single day percentage fall since September 23. In spite of today’s fall, the ringgit is the second best performing Asian currency in October after the Indonesian rupiah, having rallied by 4.93% so far this month.
The ringgit will likely end the year at between 4.45 and 4.50 against the U.S. dollar, said Rabobank’s Asia Pacific head of financial markets Michael Every.
Foreign investors continued to be net buyers with net purchases of 221.2 million ringgit ($53.3 million) worth of Malaysian shares on Monday, having invested $187.7 million in the previous week, according to BIMB Research.
Other Southeast Asian stock markets closed lower, led by 3.19% fall in Indonesia’s Jakarta Stock Exchange Composite Index. Singapore’s Strait Times Index and Thailand’s SET Index fell 1.38% and 0.38% respectively. Philippine’s PSE Composite Index fell 1.91%.
Broader Asian stocks fell. Japan’s Nikkei 225 and South Korea’s Kospi fell 1.11% and 0.13%. While Taiwan’s TWSE fell 0.07% and Hong Kong’s Hang Seng shed 0.57%, China’s Shanghai Composite Index rose 0.18%.
The latest trade data out of China did little to calm investors’ concerns for growth at Asia’s largest economy. The country’s dollar denominated September exports fell by 3.7% year-on-year while imports slumped 20.4%.
Malayan Banking and Public Bank, the largest and third largest banks by assets, rose 1.29% to 8.62 ringgit and 0.32% to 18.54 ringgit respectively. The finance index rose by 0.6%.
AMMB Holdings and Hong Leong Bank were among the largest gainers, closing higher by 2.51% to 4.90 ringgit and 1.02% to 13.92 ringgit.
“We think that the banking system is much stable as compared to the 1998 crisis and we have a long term positive outlook on banking stocks,” said Lim of JF Apex. “We prefer Public Bank and Hong Leong due to their relative low exposure to Indonesia.”
Tenaga Nasional and Genting fell on profit taking. While Tenaga lost 0.62% to end at 12.8 ringgit, Genting declined 3.1% to 7.51 ringgit. The stocks had rallied by over 7% and 6% respectively in the previous eight sessions.
SapuraKencana Petroleum fell for the second consecutive session on lower crude oil prices, shedding 1.39% to end at 2.13 ringgit. Nevertheless, the stock is amongst the best performing shares in the KLCI in October, having climbed over 11% so far this month.
Oil prices fell overnight weighed by profit taking and on supply worries. The U.S. benchmark crude oil and the global benchmark Brent crude oil fell over 5% overnight.
IOI Corporation and Sime Darby should ease into profit-taking mode given the overbought technical momentum, according to a note by TA securities.
IOI Corporation fell by 0.91% to 4.36 ringgit and Sime Darby fell by 0.91% to 8.68 ringgit. The stocks had rallied by over 8% and 12% in October prior to today’s fall.
The planation index rose by 0.09%. Malaysia’s stockpile, at a record high of 2.63 million metric tons, will cap the near term upside of Crude palm oil price, according to Ong Chee Ting, an analyst with Maybank IB Research. It has a neutral call on the plantation sector.
Crude palm oil for December rose 66 ringgit to 2,323 per ton.
Malaysian market wrap: Banks drive indexes higher for seventh session, ringgit slips
