Statistics
The 30-stock benchmark index slipped 0.29% or 4.46 points to 1,542.97, dragged by losses including index-linked plantation stocks as well as select blue chips. Losers outpaced gainers by 548 to 258, while 282 counters traded unchanged. Volume was 1.83 billion shares valued at RM2.21 billion.
Key regional markets were mixed with the Shanghai Composite Index down 0.72% to 2,695.72, Hong Kong’s Hang Seng Index down 0.31% to 23,801.78 and Taiwan’s Taiex Index shed 0.07% to 8,947.79, while South Korea’s Kospi rose 0.59% to 2,082.16 and Singapore’s Straits Times Index gained 0.04% to 3,185.76.
Comment on Extended Losses
MIDF Research head Zulkifli Hamzah said the local equity market was caught up in a country reallocation exercise by global funds, adding that out-of-favour currently were developing and emerging Asian markets such as Thailand, Indonesia, the Philippines (TIPs) and India.
He said that in the spotlight were developed markets such as Hong Kong, Taiwan and Korea, and that this was a classic reversal of fortune based on the performance of those markets in 2010.
“As far as Malaysia is concerned, its fortune is pretty much divided. We believe that one group of global investors still lump Malaysia as a developing and emerging market in the same category as the TIPs market.
“The other group of investors would be the more forward looking one, taking cognisance the fact that Malaysia will be reclassified alongside Taiwan as an “Advanced Emerging Market” by FTSE come June this year,” he said.
Zulkifli said that in addition to the country reallocation exercise, the spectre of an engineered economic slowdown in China as a response to accelerating inflation was expected to continue to haunt the market.
However, he said the China episode was expected to be transient, adding that flow of fund data suggested that foreign investors were still net buyers of equities in Taiwan and Korea, the two countries most vulnerable to a China slowdown.
If China is such an overwhelming market negative, foreign investors should be net sellers throughout Asia, he said.
Meanwhile, SJ Securities Sdn Bhd in a note to clients yesterday said the local bourse was likely to be in a consolidation or base-building phase this week as investors would prefer to be on the sideline before a long holiday.
“Next week has only one day trading on Monday and half a day on the Chinese New Year eve. Nonetheless, while the key index stocks may take a breather this week, the second and third liners may remain active on rotational play mode.
“One should look at the correction as an opportunity to buy into quality shares as the market may reverse its short term downtrend post Chinese New Year holiday,” it said.
Top Gainers and Losers
On Bursa Malaysia, plantations stocks were among the major losers with KL Kepong Bhd down 46 sen to RM21.88, Kulim (M) Bhd fell 32 sen to RM12.96, Glenealy Plantations (Malaya) Bhd lost 20 sen to RM5, Boustead Holdings Bhd down 18 sen to RM5.56, PPB Group Bhd fell 12 sen to RM17.08 while IOI Corporation Bhd shed four sen to RM5.85.
Other decliners yesterday included Guinness Anchor Bhd, LPI Capital Bhd, Mudajaya Group Bhd, Lafarge Malayan Cement Bhd and Tradewinds (M) Bhd.
Malaysia Smelting Corporation was the top gainer yesterday, riding on the surge in tin prices as well as a report by The Edge Financial Daily that the stock was a cheaper entry into the mining and smelting sector when it lists on Singapore’s Exchange Securities Trading Ltd.
The public offer of its shares for secondary listing on SGX has been fixed at S$1.75 or RM4.17 a share.
Written by Surin Murugiah
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