KLCI nears critical 1,700 on Maybank, Petronas losses (Update)

KUALA LUMPUR: The FBM KLCI extended its losses in volatile trade on Wednesday, bogged down by losses in Petronas related stocks and Maybank which sent the index towards the critical 1,700 level.

However, there was some glimmer of hope as local funds and retailers were picking up battered down stocks based on the firmer broader market. Foreign funds were net sellers in 2014, hitting nearly RM7bil.

At 5pm, the KLCI was down 7.40 points or 0.43% to 1,709.18, but off the intra-day low of 1,706. Turnover was 1.606 billion shares valued at RM2.035bil. However, gainers beat losers 413 to 352 while 296 counters were unchanged.

The ringgit continued to lose ground against the US dollar, falling to 3.5817 at 5pm from the previous close of RM3.5567.

Reuters reported the euro hit a nine-year trough on Wednesday as collapsing oil prices and worries about the world economy drove skittish investors into the arms of safe-haven sovereign debt. From Japan to Germany to Australia, government borrowing costs fell to all-time lows as oil fell 10% in just two days - Brent crude broke below the psychological US$50 barrier - as investors wrestled with the risk of global deflation.

BIMB Securities Research said in its strategy report that many research houses were concerned if the banking sector, being the pillar of the market, would be able to deliver this year. 

“So far up till November 2014, loans growth had touched 7.7% which is lower than the anticipated average of 10%-11% at the start of 2014. Meanwhile, in tandem with the crash in crude oil prices there are also fresh concerns of the banks’ exposure to the sector in a worst case scenario,” it said.

In Wednesday’s trading, Petronas Dagangan fell 28 sen to RM16.66 and Petronas Gas 22 sen to RM21.56 while Petronas Chemicals shed nine sen to RM4.92.  SK Petro fell three sen to RM2.26.

US crude oil fell 53 cents to US$47.40 and Brent 72 cents lowers at US$50.38.

Maybank fell 19 sen to RM8.61 on worries about its exposure to the One Malaysia Development Bhd loans. It erased 3.10 points from the KLCI. CIMB and RHB Cap shed nine sen to RM5.25 and RM7.30 while Public Bank slipped two sen to RM17.58.

Crude palm oil for third month delivery rose RM37 to RM2,321 per tonne on expectations of a reduction in its output following the floods in the east coast of Peninsular Malaysia.

Heavyweight plantation-property Sime Darby lost 13 sen to RM9.02, wiping out 1.41 points from the index. United Plantations fell the most, sliding 44 sen to RM23.82, PPB Group lost 18 sen to RM13.90 and FGV five sen to RM2.10 but Batu Kawan gained 20 sen to RM17.50 and KL Kepong added six sen to RM21.80.

My EG jumped 43 sen to RM4.70 after it was appointed by the government to compile and maintain database on the country’s foreign workers.

Genting Bhd added 17 sen to RM8.60 and added 1.11 points to the KLCI. Tenaga gained six sen to RM13.82 while Astor rose two sen to RM3.03.

Among the key regional markets,  China stocks closed up on Wednesday, hovering around five-year highs, with brokerage shares strengthening after the regulator said it planned to relax rules for securities firms to set up subsidiaries and on background requirements for shareholders. The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.1%, to 3,643.79, while the Shanghai Composite Index gained 0.7%, to 3,373.95, Reuters reported.

In Hong Kong, the Hang Seng index rose 0.8%, to 23,681.26, while the China Enterprises Index was unchanged at 11,991.02. It shrugged off any negative impact from losses in US markets as regional bourses steadied after recent falls.

Japan’s Nikkei 225 rose 0.01% to 16,885.33;

Taiwan’s Taiex rose 0.35% to 9,080.09;

South Korea’s Kospi rose 0.07% to 1,883.83.

Singapore’s Straits Times Index rose 0.5% to 3,298.36.

Spot gold fell US$2.63 to US$1,215.96.

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