KLCI closes lower, ringgit weakens against US$

KUALA LUMPUR: Petronas Chemical, Axiata and Tenaga Nasional dragged the FBM KLCI into the red at the close on Wednesday as investors decided to take some money off the table due to the US-China trade conflict. 

At 5pm, the KLCI close down 5.82 points or 0.36% to 1,633.55. Turnover was 2.47 billion shares valued at RM2.05bil. Decliners beat advancers two to one or 551 losers to 265 gainers and 396 counters unchanged.

Consumer stocks were among the top 10 losers as BAT fell 42 sen to RM34.10, Carlsberg 28 sen lower at RM25.42 while Heineken ended the day 16 sen lower at RM24.32.

US light crude oil fell six cents to US$61.34 and Brent was nine cents down at US$69.79.

Heavyweights Petronas Gas lost 18 sen to RM17.36 and Petronas Chemical 13 sen lower at RM8.92 but Petronas Dagangan added 12 sen to RM24.24. Dialog shed one sen to RM3.16. Petronas Chemical's decline erased 1.8 points from the KLCI.

Tenaga lost 12 sen to RM12.02, MISC 10 sen to RM6.80 and IHH five sen to RM5.51. MAHB surrended 26 sen to RM7.30. Genting fell five sen to RM6.85 and Sime Darby two sen to RMRM2.25.

Cement producer Tasek continue to give up the recent gains, falling 16 sen to RM5.48.

Petra Energy tumbled 17 sen to 88 sen in active trade despite it had achieved a net profit of RM1.72mil for its first quarter ended March 31, up 68.3% from RM1.02mil a year ago.

The better performance was due to higher activities in its services segment, particularly those in the hook-up, commissioning and top-side major maintenance (HuC/TMM) contract with Petronas Carigali Sdn Bhd. 

Public Bank fell eight sen to RM22.40, Maybank shed two sen to RM8.97, CIMB was unchanged at RM5.20 but Hong Leong Bank gained six sen to RM19.86.

However, RHB Bank rose 13 sen to RM5.82 and added 0.9 of a point to the KLCI while AmBank gained 11 sen to RM4.55. 

RHB Bank remained the top pick by CIMB Equities Research after the 25bps cut in the Overnight Policy Rate (OPR) to 3%. The research house also said the rate cut has the least impact on AmBank as its floating-rate loan ratio is one of the lowest in the sector at 71.6% (for FY20F). 

Crude palm oil for third month delivery fell RM18 to RM2,022 per tonne.  Sime Plantation lost three sen to RM5.07, IOI Corp one sen to RM4.41, PPB Group two sen to RM18.72 but KL Kepong edged up two sen to RM24.70.

Among the telcos, Axiata fell eight sen to RM4.56 and erased 1.26 points from the index as traders took profit after the previous day's rally on the merger of its Asean and South Asian operations with Digi. Digi was up one sen to RM4.81 after the previous day's rally. Maxis gained five sen to RM5.52.

The ringgit weakened 0.02% against the US dollar to 4.1490.  MIDF Research has revised downwards its ringgit outlook and sees the local currency trading at 4.10 to the US$ by end-2019 as more risks emerge.

It said this was a 2% decrease from its previous forecast of 4.00 to the US$. It expects the ringgit to average at a higher rate of 4.12 this year compared to 4.05 previously estimated.

MIDF Research cited the major factors impacting the ringgit were  the decision of Norway’s sovereign wealth fund (SWF) to reduce exposure to emerging market including Malaysia; the US-China trade conflict and the cut in the overnight policy rate.

On the external front, the Chinese stock market fell on weaker-than-expected exports numbers, adding to investor concerns over Beijing and Washington’s protracted tariff tussle.  The Shanghai Composite index fell 1.1% to 2,893.76, while the blue-chip CSI300 index lost 1.4%, Reuters reported.

Hong Kong stocks closed lower , tracking a decline in global markets, as China’s mixed bag of trade data and fears of an escalation in the trade war. At the close of trade, the Hang Seng index was down 1.2% at 29,003.20. The Hang Seng China Enterprises index closed 1.5% weaker.


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