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Malaysian market wrap: Shares end nearly flat, ringgit snaps 4-day winning streak

Malaysian market wrap: Shares end nearly flat, ringgit snaps 4-day winning streak

KUALA LUMPUR (NewsRise) — Malaysian shares ended almost unchanged Thursday as investors turned cautious ahead of the release of minutes from the U.S. Federal Reserve’s September policy meeting.

     The minutes will give an indication on the thinking of U.S. central bank officials behind last month’s decision as well as possible clues on timing of the rate hike. The FOMC voted to leave its benchmark rate at its current rate between zero and 0.25% in September.

     The nation’s benchmark FTSE Bursa Malaysia KLCI ended 0.17% higher at 1,692.20 points. Gains in Axiata Group and SapuraKencana Petroleum led markets higher for the fourth consecutive session.

     The ringgit fell 0.42%, its first fall in four sessions. The ringgit has rallied by 4% so far this week and is on course for its best weekly percentage gain since September 1998.

     “The positive market outlook is driven primarily by rise in oil prices as well the recent rally in the ringgit. Expectations of inflow into stocks by ValueCap in the next two-three weeks is also adding to the bullish sentiment,” says Yee Huap Low, Head Research at Hong Leong Investment Bank.

     “Globally, the relative stabilization in developed nations’ equities and delay in hike by the Federal Reserve is an added tailwind for local equities.”

     14 of 30 constituents in the index ended higher, while overall declining issues outnumbered advancing ones 520 to 339, and 984 closed unchanged.

     Foreign investors were net buyers for the second consecutive session Wednesday, buying 290.1 million ringgit ($69.1 million) stocks, following a $14 million purchase on Tuesday, according to BIMB Research.

     Other Southeast Asian stock markets closed mostly lower. Singapore’s Strait Times Index and Thailand’s SET Index rose 0.50% and 0.11% respectively. Philippine’s PSE Composite Index fell 0.03%. Indonesia’s Jakarta Stock Exchange Composite Index rose 0.1%.

     Broader Asian stocks fell. Japan’s Nikkei 225 and Hong Kong’s Hang Seng fell 0.99% and 0.71%. South Korea’s Kospi gained 0.68% while Taiwan’s TWSE fell 0.58%.

     China markets resumed trading after a seven-day break. China’ Shanghai Composite Index rose by 3%.

     Axiata rose 3.5% to 6.21 ringgit. The stock has rallied by almost 7% since its acquisition of a majority stake in Myanmar Tower Company. The Myanmar tower market is expected to be one of Southeast Asia’s largest and fastest growing telecommunication infrastructure service markets.

     Renewed buying interest led most banking stocks higher. Public Bank rose 0.66% to 18.38 ringgit. CIMB Group Holdings, the third largest bank by market value, rose 0.41% to 4.92 ringgit.

     Value buying in UMW Holdings drove the stock higher 4.92% to 8.11 ringgit. The stock has fallen by 25% in the last 6 months as against an 8.5% decline in KLCI.

     Oil and gas service major Sapurakencana Petroleum extended yesterday’s near 9% advance, gaining 2.90% to 2.13 ringgit.

     “Resurgent buying momentum on oil & gas stocks should support further gains given the revival in global oil prices, and lessen the extreme bearish sentiment in the sector,” TA Securities said in a note.

     U.S. crude oil snapped a three session gaining streak, falling 1.5% to $47.80 per barrel overnight, after U.S. government data showed a larger than expected crude inventory buildup. Oil prices have rallied by almost 25% in the last six weeks. U.S crude was last quoted at $48.08, a gain of 0.5%

     “Oil prices will remain a key determinant for the markets, along with the evolving global growth expectations,” Lee said.

     Genting Malaysia rose 1.36% to 4.48 ringgit, having advanced 4% on Wednesday. The company announced yesterday that its 150 million pound Resort World Birmingham will open on October 21.

     “We are neutral on the opening as the group’s UK operations have not been smooth sailing all these years as earnings were fairly volatile for its VIP-centric clientele,” said Teh Kian Yeong of Kananga Research.

     The stock was downgraded to ‘market-perform’ from ‘outperform’ following the recent rebound in share price, with a target price of 4.41 ringgit. The stock has risen by more than 10% in the last 5 weeks.

     Crude palm oil (CPO) for December delivery dropped for the third successive session, falling 43 ringgit to 2276 ringgit per ton. A stable ringgit and caution ahead of key data release next week on Monday weighed on prices. So far this week, the contract has fallen by 4.65%.

     The planation index fell by 0.12%. Sime Darby fell 0.45% to 8.76 ringgit. IOI Corporation rose 0.93% to 4.34 ringgit.

Malaysian market wrap: Shares end nearly flat, ringgit snaps 4-day winning streak

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