Late strong pick-up by Bursa

PETALING JAYA: Bursa Malaysia staged a late strong pick-up before closing, led by gains in selected blue chips such as CIMB Group Bhd, Axiata Group Bhd and MISC Bhd.

The benchmark FTSE Bursa Malaysia KL Composite Index (FBM KLCI) closed 12 points higher to 1,773.16 yesterday, after a slow start to the week.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew said foreign investors were net sellers yesterday despite the strong pick-up in the FBM KLCI.

“It was a last-minute push before the long holiday, and it was quite unusual considering the results season is still ongoing,” he told StarBiz.

On this week’s FBM KLCI performance, Pong said the global situation involving the US-North Korea geopolitical tensions had partly impacted the market.

However, he reckons that the main driver of the slow week was the disappointing corporate results for the second quarter.

“The second quarter results have been disappointing, especially among the medium and small-cap companies,” he said.

He pointed out that although blue-chip companies were reporting strong quarterly results compared to last year, the level is a far cry from the period between 2013 and 2015.

Yesterday’s rebound in the FBM KLCI was in line with other major markets in the region, which took their cue from Wall Street’s stronger close a day earlier.

An analyst reckoned that MSCI rebalancing could have also influenced the last-minute buy in the local stocks.

Aside from the blue chips, big capitalisation companies such as Malaysia Airports Holdings Bhd (MAHB), TIME Dotcom Bhd and UMW Holdings Bhd also saw last-minute buying. Shares of MAHB closed 13 sen higher to RM9, while Time dotCom and UMW went up by 50 sen and 44 sen to RM9.90 and RM6.08, respectively.

Pong pointed out that there remained resistance for the FBM KLCI to break beyond its current level. “The ceiling for the FBM KLCI index seems to be capped at 16 times earnings multiple,” he said.

With the results season coming to an end, Kenanga Research said the incoming report cards were still disappointing, with no outperformers so far for companies under its review.

Bursa Malaysia will be closed from today until Monday as the country marks the National Day holiday today and Hari Raya Haji tomorrow.

Meanwhile, the geopolitical tensions between the US and North Korea sent gold price to an 11-month high as investors seek safe-haven assets.