Spread the news

PETALING JAYA: Bursa Malaysia’s key index delivered a surprise today as it closed 1.38% or 20.69 points higher at 1,523.59 points despite the latest bout of political uncertainty centering on Malaysia’s prime ministership following the resignation of Tan Sri Muhyiddin Yassin due to lack of parliamentary support.

In regard to the FBM KLCI’s rise, Rakuten Trade’s head of research Kenny Yee attributed it to bargain-hunting activities by investors and a sign that the political landscape is getting less volatile.

Similarly, Socio-Economic Research Centre (SERC) executive director Lee Heng Guie sees this as a sign that the market expects a quick resolution to the appointment of a new prime minister and the accompanying Cabinet amid the economic and pandemic challenges.

“We are in critical time to fight Covid-19, getting more population vaccinated and helping struggling businesses and sectors to survive,” he told SunBiz. It is crucial that the new government be ushered in quickly to do the necessary to protect lives while keeping the economy and business afloat.

RHB Banking group’s chief economist Dr Sailesh Kumar Jha attributed the increase to a rotation of capital flows into the country’s financial market.

He said it is a rotation of capital from Singapore to the Malaysian market and it has come onshore due to the fact that the negative news in the domestic markets was expected.

On the flip side, the good news in the island republic – from the reopening of the economy, vaccinations efforts, policy moves by the Singapore government to manage the economy and the pandemic has all been priced in by the market.

“Here the macro view is that the economy bottomed in July and we are seeing signs of recovery in August,” said Sailesh.

“It seems like the international investors are one of the primary drivers of the stock market here and they probably see enough good news going forward at least from a short-term perspective.”

He believes the worrying sentiment surrounding Malaysia’s political situation has reduced among international investors.

Sunway University economics professor Dr Yeah Kim Leng opined that one of the catalysts could be investors pricing in a favourable outcome in the political transition, or taking advantage of an oversold position.

“Other likely factors include the further loosening of restrictions on activities allowed to operate and the steady rise in vaccinations that stoke optimism of an earlier economic recovery.”

Aside from the FBM KLCI, all the other indices, too, saw an improvement today, led by the FBM Palm Oil Plantation Index which improved by 1.7% or 169 points to 10,106.23, followed by Bursa’s Industrial Products and Services Index’s 1.5% increase or 2.82 points to 190.75 points.

Meanwhile, Vitrox Bhd was the biggest gainer for the day, with a 92 sen or 4.85% jump, closing at RM19.90 a share.

Click to rate this post!
[Total: 0 Average: 0]

Spread the news
CONTACT US : support@melodyinter.com
Previous articleCGS-CIMB: Prime ministerial toss-up a bane to domestic-oriented sectors
Next articleBBNaija ”Shine Ya Eye” ex housemate, Princess, denies reports her fans gifted her a car

LEAVE A REPLY

Please enter your comment!
Please enter your name here