KUALA LUMPUR: Amid the carnage in the global equities including Malaysia due to the Covid-19 and oil price shock, a stockbroker in Malaysia urged Bursa Malaysia Securities to halt trading immediately.
Datuk Dr Azman Manaf, who is also the chairman of Association of Stockbroking Companies of Malaysia, had on Thursday called for the suspension in line with the recent Movement Control Order declared by Prime Minister Tan Sri Muhyiddin Yassin.
“Bursa Malaysia should be suspended for the time being as a defensive measure to protect the stockmarket from suffering severe damage that could take almost a decade to heal, ” he said in a statement, which was in his personal capacity.
Azman pointed out the closing of FBM KLCI at 1,239.01 on Wednesday showed the 30-stock index had fallen by more than 28% from end of December 2019, which was 1,588.76.
He added market participants have already endured two major events recently, namely the change of government and the Covid-19 pandemic.
Stock exchanges around the world have plummeted, the worst being Wall Street.
“The Malaysian stockmarket has experienced a 23% drop in market capitalisation from RM1.04 trillion on Dec 31,2019 to RM804.63bil on March 18,2020, ” he pointed out.
He said 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.
The suspension order in Philippines was called after stock markets and oil prices went into freefall after its central banks' fresh stimulus measures failed to dampen investors’ fears.
“With the suspension of Bursa Malaysia, all participants of the stock market, i.e investors, market players, pension funds (EPF, LUTH, LTAT, PNB, etc), 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.
He warned that the negative impact will be catastrophic and possibly even drive the index below the 1,000 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.
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