Malaysian market wrap: Shares gain on improved risk appetite

Malaysian market wrap: Shares gain on improved risk appetite

KUALA LUMPUR (NewsRise) — Malaysian shares rose for a second session Thursday, tracking regional indices, as concerns of a global slowdown eased after latest factory activity data showed signs of a modest pickup in Asia’s largest economy.

     The ringgit, Asia’s worst performing currency in 2015, fell 0.15%. The unit has fallen almost 26% so far in 2015. The ringgit chalked its worst quarter in nearly 18 years during the July-September period, declining 16.5%.

     The nation’s benchmark FTSE Bursa Malaysia KLCI rose 0.80% at 1,633.93 points. Eighteen of the 30 constituents in the index ended higher, while overall advancing issues outnumbered declining ones 465 to 306, and 1,082 closed unchanged.

     Most Asian markets closed higher, led by a 1.92% rise in Japan’s Nikkei. South Korea’s Kospi rose 0.81%, while Taiwan’s TWSE climbed 1.40%. Hong Kong’s financial markets were shut Thursday and China’s markets are closed till Oct. 7.

     Caixin/Markit’s final China Manufacturing Purchasing Manager’s Index for September fell slightly to 47.2 from 47.3 in the previous month, but came in a tad higher than the preliminary 47.0 reading released last month. Still, the numbers showed factory activity contracted by the most in over six years.

     The Nikkei Malaysia Manufacturing PMI for September rose to 48.3 from 47.2 in August, propped by new export orders.

     “Export orders have remained a bright spot, possibly reflecting the sharp fall in the ringgit, which has been the weakest performing Asian currency by some margin this year,” Krystal Tan, Asia economist at Capital Economics said in a note.

     Most other Southeast Asian stock markets closed higher, with Indonesia’s Jakarta Stock Exchange Composite Index rising 0.73% and Singapore’s Strait Times gaining 0.39%. Thailand’s SET Index shed 0.29%, while Philippine’s PSE Composite Index fell 0.04%.

     European stocks rose Thursday morning, while U.S. stocks were poised to extend overnight gains.

     “Even as external economic environment is expected to improve moving forward, it remains quite challenging,” said Peck Boon Soon, Head of Economics at RHB Research. “China is our main concern. However recent indicators seem to suggest that the growth may have bottomed out. While we expect global growth to remain subdued, we do not expect it to fall off the cliff.”

     Conglomerate Sime Darby, with businesses from plantations to motoring, extended Wednesday’s 4% gains, rising 3.34% to 8.05 ringgit. Crude palm oil for the benchmark December delivery rose 36 ringgit to 2,411 ringgit per metric ton.

     Banking majors CIMB Group Holdings and Public Bank rose 0.67% to 4.49 ringgit and 0.80% to 17.66 ringgit. Banking stocks have a near-third weightage on the KLCI.

     Malaysian gaming giant Genting rose 2.34% to 7.44 ringgit.

     Television services provider Astro Malaysia Holdings recovered from Wednesday’s two-percent decline, gaining 2.48% to 2.89 ringgit.

     Oil services provider SapuraKencana Petroleum and Petronas Chemicals Group fell more than one percent each to 1.86 ringgit and 6.06 ringgit.

     Latex product manufacturers Hartalega Holdings and Top Glove Corp. fell 2.47% to 4.73 ringgit and 1.24% to 7.97 ringgit.

     “We expect a modest improvement in global demand to help support exports in the coming quarters,” Capital Economics’ Tan said. “But Asia’s export recovery will be gradual and a return to the double-digit rates of export growth that were the norm before the global financial crisis is very unlikely.”

Malaysian market wrap: Shares gain on improved risk appetite