FBM KLCI, ringgit hammered again by Covid-19 fears

PETALING JAYA: The Malaysian stock market and the ringgit, along with regional markets, experienced a bloodbath again today on fears over the escalating Covid-19 outbreak, which has been declared a pandemic by the World Health Organisation (WHO).

The FBM KLCI tumbled 24.40 points or 1.69% to close at an intraday low of 1,419.43 points in a broad sell-off today.

The ringgit continued to lose momentum for the fifth consecutive trading day, weakening 0.78% to 4.2625 against the US dollar, from 4.2295 on Wednesday, the lowest since August 2017.

On Bursa Malaysia, only the healthcare index was in positive territory, rising 0.15% to 1,349.95 points as glove stocks surged in response to the worsening of the Covid-19 situation. Top Glove Corp Bhd was the top gainer among glove stocks, rising 3.66% or 23 sen to RM6.51. Kossan Rubber Industries Bhd was up 3.52% or 18 sen to RM5.30, Supermax Corp Bhd shot up 2.31% or 4 sen to RM1.77, while Hartalega Holdings Bhd gained 1.39% or 9 sen to RM6.57.

The energy index registered the biggest drop by 6.31% as crude oil prices sank. Brent was trading down 6.9% while US crude was down 6.2% at about 7pm today.

Oil and gas (O&G) stocks remained the most active on the local bourse, as the oil price volatility continued to put pressure on the sector. Short-selling of JAKS Resources Bhd was suspended after its share price fell more than 15%. At the close, the stock was 17.1% lower to 87 sen on 88.22 million shares done.

Brewery stocks Carlsberg Brewery Malaysia Bhd and Heineken Malaysia Bhd were the top losers, declining 11.5% and 4.8% to RM24.54 and RM23.24.

Overall, there were only 167 gainers against 923 losers on Bursa with turnover of 3.79 billion shares valued at RM3.07 billion.

“Amid the renewed market choppiness, we advocate a defensive stance, favouring the REIT sector, while the unabated Covid-19 situation may see glove manufacturers continue their upward trajectory,” said Malacca Securities.

Meanwhile, CGS CIMB advised investors to stay overweight on the glove sector despite its premium valuation, which is premised on strong global glove demand and a favourable operating environment, allowing glove makers to outshine in terms of positive earnings growth in a volatile FBM KLCI market.

“Currently, we have ‘add’ recommendations for all four glove stocks, with Top Glove and Kossan as our top picks.”

source https://www.thesundaily.my/business/fbm-klci-ringgit-hammered-again-by-covid-19-fears-AA2121615