Bursa rallies to end at nearly 4-month high

MIDF Research says the market rebound was wholly expected, buoyed by ‘flattening Covid-19 curve’ and monetary stimulus announcements.

KUALA LUMPUR: Bursa Malaysia rallied today to close at its highest level in nearly four months, in tandem with the positive performance on regional bourses despite research firms’ view that the movement was majorly liquidity-driven.

The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) soared 30.84 points to end the day at 1,538.53 from 1,507.69 at Tuesday’s close.

The index, which opened 7.99 points stronger at 1,515.68 this morning, moved between 1,492.34 and 1,542.01 throughout the day.

The overall market breadth was positive with advancers outpacing decliners 564 to 526, while 371 counters were unchanged, 407 untraded and 19 others suspended.

Total volume eased to 9.4 billion shares worth RM7.01 billion from 9.6 billion shares worth RM6.2 billion on Tuesday.

MIDF Research in a note said the market rebound (reaction phase) was wholly expected, buoyed by “flattening Covid-19 curve” and monetary/stimulus announcements.

“But the magnitude of rebound exceeded expectations as the market seems to impute a blue sky scenario with regard to the post-lockdown economic recovery.

“A point to note is that the rebound went into overdrive as the US Federal Reserve (Fed) kicked off the Secondary Market Corporate Credit Facility.

“Hence, it was arguably liquidity rather than fundamentally driven,” said MIDF Research.

It said rising financial conservatism among households and businesses may be counterproductive to economic recovery efforts.

Moreover, the US Fed Chair warned that the slow pace of economic recovery may turn liquidity into solvency problems.

“A cue from China (already in post-lockdown) is that economic recovery may not be plain sailing.

“We reckon the second downward thrust (fallout phase) may later emerge, possibly in the third quarter, as the fuller extent of economic and corporate earnings impacts of Covid-19 become manifest,” it said.

Regionally, Japan’s Nikkei rose 1.29% to 22,613.76, Hong Kong’s Hang Seng expanded 1.37% to 24,325.62 and Singapore’s Straits Times surged 3.40% to 2,700.39.

Among heavyweights, Maybank increased 47 sen to RM7.98, Public Bank rose RM1.74 to RM17.38 and Petronas Chemicals added 31 sen to RM6.53.

Meanwhile, Tenaga eased two sen to RM11.98, and IHH Healthcare declined one sen to RM5.51.

Hong Leong Financial Group emerged the top gainer today, rising RM1.82 to RM15.00, with 401,500 shares traded, and contributed 3.93 points to the composite index.

Of the actives, Hibiscus Petroleum declined 1.5 sen to 67 sen, Bumi Armada eased half-a-sen to 25 sen, while Velesto Energy, AirAsia and AT Systematization were flat at 17.5 sen, 82.5 sen and eight sen, respectively.

On the index board, the FBM Emas Index was 153.39 points firmer at 10,803.01 and the FBMT 100 Index rose 161.73 points to 10,662.61.

Meanwhile, the FBM Emas Shariah Index eased 74.06 points to 12,130.72, the FBM ACE declined 175.86 points to 5,697.21, and the FBM 70 decreased 12.77 points to 13,205.77.

Sector-wise, the Financial Services Index surged 910.18 points to 13,601.89, the Industrial Products and Services Index improved 3.39 points to 134.8, and the Plantation Index added 42.81 points to 6,796.66.

Main market volume rose to 6.32 billion shares worth RM6.2 billion from 5.41 billion shares worth RM4.86 billion on Tuesday.

Warrants turnover improved to 743.77 million units worth RM157.45 million from 545.61 million units worth RM134.8 million yesterday.

Volume on the ACE Market decreased to 2.34 billion shares worth RM653.26 million from 3.66 billion shares worth RM1.21 billion previously.

Consumer products and services accounted for 906.71 million shares traded on the Main Market, followed by industrial products and services (776.43 million), construction (332.78 million), technology (300.04 million), SPAC (nil), financial services (170.41 million), property (369.06 million), plantations (396.78 million), REITs (12.17 million), closed/fund (4,000), energy (2.49 billion), healthcare (214.67 million), telecommunications and media (196.55 million), transportation and logistics (127.38 million), and utilities (27.00 million).

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