PETALING JAYA: The stock market, powered by the rise in rubber glove stocks which makes a number of them more valuable than a number of household corporate names, almost pared back all of its losses for this year as it remains supported by cheap borrowing costs and an improving economic outlook.
Glove stocks continued to rally including Supermax Corp Bhd which hit an all-time high of RM12.44 per share, giving it a market capitalisation of RM16.1bil.
Top Glove Bhd’s market capitalisation was at RM57.1bil and Hartalega Holdings Bhd at RM56.2bil.
The stocks are the fourth and fifth largest companies on Bursa Malaysia based on market capitalisation.
The benchmark index FBM KLCI closed at 1,583.25 points yesterday, which was just five points lower than at the start of the year.
Notably, the index, which measures the 30 top companies on Bursa Malaysia, started the year at 1,588.76 points.
The FBM KLCI climbed to 1,590 points at 3.30pm, erasing all its year-to-date losses.
The index then traced back slightly on profit-taking activity just before the closing.
Meanwhile, banking stocks continue their upward momentum despite the interest rate cut by Bank Negara that could impact their bottom line.
On Tuesday, the central bank cut its overnight policy rate (OPR) by another 25 basis points to 1.75%, the lowest since 2004.
Analysts said the OPR, which has been cut for the fourth time, is an added negative for banks which are already competing for a pie that has gotten smaller in recent months.Rakuten vice-president of equity research Vincent Lau remained bullish on the local stock market and expected more gains in the FBM KLCI in the near term
“The upward momentum of the market is driven by the recovery hope in the economy, cut in interest rates and rally in the US, China and European stock markets, ” he told StarBiz.
The market continues to be supported by retail investors who bought RM6.15bil net year-to-date compared with RM2.5bil in 2019 full-year.
Lau said small and mid-cap stocks remained on its top volume due to high participation of retailers.
He pointed out that although Covid-19 infections were still high, the fatality rate was slowing, which is a positive for a faster recovery of the economy.
Lau said the cut in interest rates would also help to boost the market in the near-term.
Across the broader Bursa Malaysia, turnover was robust with 10.23 billion shares valued at RM5.18bil.
There were 537 gainers, 496 losers and 433 counters unchanged.