Rakuten Trade's Thong said the dip in the benchmark index would present a timely opportunity for bargain hunting as the fundamentals of Malaysian corporates remain solid.
PETALING JAYA: Bursa Malaysia ended lower yesterday, tracking an equity rout worldwide after weak US data fuelled fears of a slowdown in global economic growth.
At 5pm, the FBM KLCI slipped 6.41 points, or 0.38% to 1,670.24, down from Tuesday’s close.
The key index opened 14 points lower at 1,662.65 and moved between 1,675.53 and 1,662.22 throughout the day.
Following the broad-based sell-off, 813 counters ended in the red compared to 307 gainers, while 438 counters were unchanged, 883 untraded, and nine were suspended.
Turnover, however, was higher at 3.04 billion units valued at RM2.89bil from Tuesday’s 2.98 billion units valued at RM2.94bil.
UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said the latest Institute for Supply Management (ISM) survey of purchasing managers for US manufacturing in August showed a fifth month of contraction and came in below expectations.
Despite the bearishness, he said there has been a shift in the inflow of funds into emerging markets, including Malaysia, as investors sought growth opportunities outside of the United States amid concerns about a weakening domestic economy.
“Within the FBM KLCI, financial and telecommunication stocks led the performance.
“Notably, the Bursa Malaysia telecommunication index was the only sector index to close in positive territory, suggesting a preference for companies with strong fundamentals, growing earnings, and attractive dividend yields,” he added.
He also anticipates that Bank Negara will maintain the overnight policy rate at its upcoming announcement today, ahead of an expected US interest rate cut in September.
“A stable interest rate environment is generally conducive to a more attractive stock market.
“Globally, investors will be closely monitoring key US employment data, culminating in the release of the August non-farm payrolls report tomorrow,” he said.
Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the dip in the benchmark index would present a timely opportunity for bargain hunting as the fundamentals of Malaysian corporates remain solid.
“With the index pulling back due to external market pressures and profit-taking, investors with a long-term view may find this an ideal moment to accumulate quality shares at a discount. As such, we maintain our FBM KLCI target for the week between 1,670 and 1,700,” he said.
