PETALING JAYA: The FBM KLCI struggled to regain a firm footing as the bellwether index of Bursa Malaysia closed below the psychological level of 1,600 points for the 11th straight trading day.
While it managed to recover most of its intraday losses earlier, the 30-stock index dipped by 3.85 points or 0.25% to 1,560.74 points yesterday.
This was amid a mixed regional market performance.
Despite a decline, 17 constituent counters gained, outnumbering nine losers and four unchanged counters.
In addition, with investor sentiment seen heading southwards as the corporate earnings season enters the final two weeks, this has only exerted more headwinds on the market.
“We think that investors will be focusing on a barrage of corporate earnings data that is expected to be as dour on the whole, in tandem with the recent release of Malaysia’s GDP data, ” according to Malacca Securities Research.
Across the broader Bursa Malaysia, market breadth was largely mixed although losers trumped gainers by 595 to 502.
Trading volume was noticeably lower than in recent sessions at 8.8 billion shares, despite being slightly higher than the 100-day average volume of 8.17 billion.
Turnover was valued at RM4.95bil.
The biggest volume came from counters in the Industrial Products and Services index, although the Healthcare index continued to be the biggest contributor to overall value of shares traded.
The top four biggest losing stocks on the stock exchange were the Big Four glove players namely Top Glove (down RM1.40), Supermax Corp Bhd (down RM1.22), Kossan Rubber Industries Bhd (down 72 sen) and Hartalega Holdings Bhd (down 46 sen).
Investors are gradually moving away from glove counters in response to news over Covid-19 vaccines in development with profit taking on glove counters in concern over a windfall tax risk for glove makers after their supernormal profits.
According to Maybank IB Research, the glove makers’ supernormal profits and the government’s extremely challenging fiscal outlook raises the risk of windfall taxes being imposed on the gloves sector.
“The imposition of windfall taxes is not without precedent, being most recently raised by the government in 2008.
“In fact, there is a specific legal act governing windfall tax application per the Windfall Profit Levy Act 1998, which allows the Minister of Finance to submit a levy order to Parliament for approval within 120 days, ” it said in a note.
The Telecommunication and Media as well as the Technology indices were the best performers yesterday, up by 1.96% and 1.57% respectively.
Across key Asian markets, Hong Kong’s Hang Seng Index advanced 0.65%, China’s Shanghai Composite Index up by 2.34% and Taiwan’s Taiex added 1.26%.
Meanwhile, Japan’s Nikkei 225 fell 0.83%, while South Korea’s Kospi and Singapore’s Straits Times Index fell 1.23% and 0.38% respectively.
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