THE KLSE got off to a rocky start in the first trading day of the year as window-dressing activities that had lent support to the market in recent weeks apparently disappeared. The Composite Index (CI ) skidded nearly 14 points or 2.15% to 632.4 yesterday, as investors sold down their holdings, on heightened fears of war between the US and Iraq.
Dealers said institutional investors who had bought shares earlier for window-dressing purposes were unloading their positions given the rising tension in the geopolitical scene and lack of buying impetus.
“The fund managers are 'undressing' the window now, after they had dressed it up for the year-end book closing,'' said a dealer.
Some foreign selling, which started in November last year, was also noted.
Nevertheless, the fall was pretty much within expectations and the day's trading volume was down sharply to 78.8 million shares from 144 million shares on Dec 31.
Losers overwhelmed gainers by a ratio of four to one.
A check by StarBiz showed that the CI had closed lower in five out of six years since 1998 on its first day of trading, with at least 2% loss.
Counters that had been buoyed by window-dressing activities were badly hit yesterday. Both Tenaga Nasional Bhd and Petronas Gas Bhd tumbled 45 sen to RM9.05 and RM6.40 respectively. And Telekom Malaysia Bhd slid 35 sen to RM7.55.
The losses among these three heavyweights brought down the CI by six points yesterday.
However, Malayan Banking Bhd, which suffered the biggest loss on Dec 31,bucked the trend to touch a day's high of RM7.60 before settling at RM7.45 yesterday, up five sen from the previous close, with about 1.97 million shares transacted.
Property stocks Mutiara Goodyear Development Bhd and Anson Perdana Bhd topped the list of 10 most active counters. Mutiara Goodyear was flat at RM1.55, with 5.4 million shares changing hands, and Anson Perdana lost 3 sen to 21 sen, with 3.89 million shares traded.
But Pohmay Holdings Bhd plunged 38 sen or 23% to RM1.29 yesterday, ahead of the Tuesday listing of its 27.5 million new shares arising from the company's bonus issue.
KL City Securities head of research Andy Ong commented that the market sentiment remained cautious owing to the external uncertainties.
“There is also nothing to lift the market sentiment. The local market shows a lack of confidence,'' said Ong, who expects sentiment to improve by the second quarter of the year on assumption that the war between US and Iraq breaks out next month.
“There are risks surrounding the war, whether it will affect recovery in the economies of both the US and Malaysia,'' Public Mutual Bhd fund manager Tan Yan Heong was quoted by Bloomberg news as saying.
Tan, who helps manage RM5.7bil of funds, expects the local bourse to be lacklustre in these two months. “Malaysia will be affected in a different way because of the security risks. But in general, if economies in the US and Europe do stage a decent recovery, we (Malaysia) should be able to enjoy some of the gains,'' he added.