Glove stocks rebound amid tapering volume on Bursa


  • Markets
  • Tuesday, 18 Aug 2020

KUALA LUMPUR: Bursa Malaysia advanced on Tuesday as counters rebounded from a two-day sell-off although trading activity continued to taper from recent highs.

At 12.30pm, the FBM KLCI was up 10.66 points to 1,571.4. Trading volume was 5.31 billion shares valued at RM3bil.

The local bourse has seen a sharp decline in turnover in recent days with daily volume dropping to 10.46 billion shares last Friday and lower still to 8.8 billion shares yesterday.The more conservative rate of trading came following days of unprecedented market volume, which peaked at 27.8 billion shares on Aug 10.

Serving to rein in investor activity, Bursa Malaysia said it has made plans to curb excessive speculation in stocks, which may include market alerts on heavily traded counters and upfront payments on selected stocks. As the bourse hit a record level of volume last Tuesday, the share prices of 12 counters had been bought higher to their daily upper limits.

"While the FBM KLCI is attempting to find stability, rotational play among the lower liners will keep trading activities at a healthy level, particularly the recovery from the technology sector.

"At the same time, the return of foreign funds in recent days is a testament of the resilient demand of Malaysia equities on the expectations of economic recovery," said Malacca Securities Research.

Meanwhile, glove makers were seen bouncing higher after losing traction over the past week on news that suggested there is progress being made in the development of a Covid-19 vaccine.

Among the top liners, Top Glove rose RM1.76 to RM24.18 and Hartalega gained RM1.44 to RM17, while the other five glove counters listed on Bursa were also seen advancing.

This comes despite a bearish caution by Maybank Investment Bank Research that the sector could face a potential windfall tax levy given its supernormal earnings during this period.

"The imposition of windfall taxes is not without precedent, being most recently raised by the government in 2008," it said.

Banks however were on the decline. Maybank fell six sen to RM7.75, Public Bank shed six sen to RM17.74, CIMB dropped six sen to RM3.51 and Hong Leong Bank dipped two sen to RM14.66

Top actives on the stock exchange were Borneo Oil down 0.5 sen to 6.5 sen, DGB sliding 0.5 sen to 5.5 sen and XOX falling 1.5 sen to 18.5 sen.

Meanwhile, Asian markets were subdued as the tech rally on Wall Street was mostly offset by US President Donald Trump raising tensions with China by further tightening restrictions on Huawei Technologies Co.

China's benchmark index rose 0.3% while Japan's Nikkei dropped 0.3%.

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Bursa Malaysia , FBM KLCI , equities

   

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