KUALA LUMPUR: The Association of Stockbroking Companies of Malaysia is urging the government to immediately suspend the trading of Bursa Malaysia Securities Bhd, in line with the movement control order implemented by Prime Minister Tan Sri Muhyiddin Yassin.
The association’s chairman Datuk Azman Manaf (pix) said this is necessary as a defensive measure to protect the stockmarket from suffering severe damage that could take almost a decade to heal.
““With the suspension of Bursa Malaysia, all participants of the stock market, i.e investors, market players, pension funds, brokers, investment bankers, foreign investors and fund managers, will be able to utilise the time and relaxation to re-engineer their strategic and trading portfolios, as well as to avoid liquidation of accounts and force selling of leveraged accounts,” he said in a statement.
Market participants have already endured two major events recently, namely the change of government and the Covid-19 pandemic.
Azman pointed out that at yesterday’s closing of 1,239.01 points, the FBM KLCI has already seen a retraction of more than 28% from end-December 2019, when the market stood at 1,588.76 points.
Year to date, the benchmark index has also seen a 23% drop in market capitalisation from RM1.04 trillion on Dec 31, 2019 to RM804.63 billion on March 18, 2020.
As at 11.45pm today, the KLCI was 2.16% or 26.78 points lower at 1,212.23 points.
Azman stated that other markets have already taken similar steps, pointing out that China suspended its Shanghai and Shenzhen Stock Exchanges amid the financial turmoil and the Philippines also suspended its stock exchange on Tuesday, becoming the first country to suspend its stock market trade in response to the widening coronavirus pandemic.
He warned that the negative impact will be catastrophic and possibly even drive the index below the 1,000 points mark if there is no evasive action put in place immediately.
“Such a catastrophe will definitely affect the national economy in the worst possible way. Banks will carry a huge amount of non-performing loans and public listed companies will see tremendous erosion of market capitalisation, while brokers will carry big contra losses and thousands of retail investors will experience bankcruptcy,” he cautioned.
source https://www.thesundaily.my/business/stockbroking-association-calls-for-klci-trading-suspension-BK2149164
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