KUALA LUMPUR: Bursa Malaysia bounced back today after the fallout from the country’s political turmoil following the collapse of the Pakatan Harapan government on Monday.
The benchmark FBM KLCI rose 0.72 per cent or 10.67 points to 1,501.73 at midday break, on bargain hunting and local funds support.
At 12.30 pm today, there were 433 gainers and 402 losers, bringing a total volume of 1.79 billion shares valued at RM1.38 billion.
The top gainers included Carlsberg Brewery Malaysia Bhd, Fraser & Neave Holdings Bhd, British American Tobacco (M) Bhd, Panasonic Manufacturing Malaysia Bhd, Heineken Malaysia Bhd, Time Dotcom Bhd, Top Glove Corp Bhd, Malaysia Airports Holdings Bhd, Ajinomoto (M) Bhd and Hartalega Holdings Bhd.
The actives included Avillion Bhd, My EG Services Bhd, Icon Offshore Bhd, Tiger Synergy Bhd, XOX Bhd, Powerwell Holdings Bhd and Sapura Energy Bhd.
The decliners included Nestle (M) Bhd, Hong Leong Financial Group Bhd, Petronas Dagangan Bhd, Dutch Lady Milk Industries Bhd, Padini Holdings Bhd and Hap Seng Consolidated Bhd.
IQI Global chief economist Shan Saeed said the market was intrigued over the new Prime Minister following Tun Dr Mahathir Mohamad’s resignation yesterday.
“Investors are hoping that there will be a very quick recovery in Malaysia with no political uncertainty. They also want more macroeconomic stability that will drive economic confidence,” he told the New Straits Times (NST) today.
He added that economic confidence would be the catalyst to drive Bursa and the ringgit.
Areca Capital Sdn Bhd chief executive officer Danny Wong Teck Meng said the market usually over reacted on certain events emotionally.
“One must hold a strategy and apply consistently to outperform others. We opine the local market’s fundamental is still holding. Hence, our strategy remains as when it is low and cheap, we will sell when it is high and expensive,” he told NST today.
OANDA senior market analyst for Asia Pacific, Jeffrey Halley said a few regional Asian markets had rebounded this morning.
“Basically, Asian markets led the move lower in equities globally yesterday. When the S&P e-mini futures rebounded by 1.0 per cent in early Asian trading on profit-taking, that dragged those regional markets, including Bursa higher,” he told the NST.
He said the movement was higher in both stocks and the ringgit adjusted in a short-term correction, rather than a change in sentiment.
“Thus, I expect the rally to be very limited and run out of steam. The political situation in Malaysia has the potential to weigh heavily depending on its outcome,” he said.
He said the Nikkei had also fallen as it was playing catch-up after being on holiday yesterday.
Malaysia has been thrown into political quandary after Dr Mahathir submitted his resignation as prime minister to Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah yesterday.
Prior to yesterday, the FBM KLCI was already down more than 20 per cent from its 2018 peak.
The index, which is made up of 30 of Malaysia’s largest stocks – such as Tenaga Nasional Bhd, Malayan Banking Bhd and Public Bank Bhd – settled the day 2.7 per cent lower at 1,489.99 points yesterday.
Political turmoil brought about by the collapse of the Pakatan Harapan government has placed further strain on Malaysia’s economy, as the country’s stock exchange closed at its lowest point since late 2010 on Monday.
Economists say that political uncertainty brought about by the shock resignation of Dr Mahathir yesterday could deter investors looking for stability at a time when the global coronavirus outbreak and trade wars are hurting growth.