KUALA LUMPUR: Malaysian shares rose to four-month highs Tuesday as a rebound in crude prices continued to spark buying.
The benchmark FTSE Bursa Malaysia KLCI rose 0.6 per cent to 1,699.80 points, its highest since April 25, according to a Nikkei Asian Review report.
Tuesday’s advance marked the KLCI’s fifth consecutive gain, matching its longest winning streak this year. The index is up 2.8 per cent this month and 0.4 per cent for the year.
The KLCI has ended higher in eight out of the last nine sessions, rising over 3 per cent, said the Nikkei Asian Review report.
Among the reasons for this were: an overall uptick in global risk appetite, increased foreign flows, better-than-expected Malaysian industrial production data and the recovery in global crude prices.
The ringgit rose for a second day, advancing 0.6 per cent to 3.983 against the dollar. The currency is up 2 per cent this month and over 7 per cent in 2016.
Global crude prices increased almost 10 per cent in the last three sessions, rising to one-month highs, as speculation of production cuts by major oil producers gathered pace, said the report.
“In the immediate-term, recovery in crude oil prices and expectations of policy easing from global central banks and governments could sustain investors’ appetite for some undervalued blue chips and cyclical constriction plays,” the Nikkei report quoted Kaladher Govindan, head of research at TA Securities, as saying in a note.
“Nonetheless, some shallow corrections are expected in the KLCI this week due to overbought conditions,” he added.
On the KLCI, 18 of the 30 constituents ended higher Tuesday, while overall advancing issues outnumbered declining ones 512 to 382.
The nation’s biggest oil and gas services provider SapuraKencana rose 1.3 per cent to RM1.59. The stock is up over 10 per cent in the last three sessions, tracking the rally in global crude prices.
CIMB has been among the biggest beneficiaries of the recent advance in the KLCI. It rose 1.9 per cent to RM4.75 Tuesday. Malayan Banking and RHB Bank advanced 1 per cent to RM8.05 and 0.6 per cent to RM5.03 Tuesday. Sime Darby rose 2.1 per cent to RM8.26.