KUALA LUMPUR, Jan 7 (Bernama) -- Bursa Malaysia’s benchmark index rebounded from earlier losses to close at its intraday high on Wednesday, gaining 0.27 per cent in late trading as buying interest returned to selected heavyweights. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) advanced 4.48 points to 1,676.83 from Tuesday’s close of 1,672.35. The benchmark index opened 0.88 of-a-point lower at 1,671.47 and subsequently hit a low of 1,665.94 during the mid-morning session before gaining momentum toward closing. On the broader market, losers led gainers by 565 to 512, while some 526 counters were unchanged, 1,046 untraded, and 10 suspended. Turnover improved to 2.73 billion units worth RM2.76 billion versus Tuesday’s 2.66 billion units worth RM2.76 billion. Dealers said that investors were cautious following geopolitical developments in Asia.
KUALA LUMPUR (March 11): The FBM KLCI closed down 15.27 points or 0.91% at its intraday low, led by glove manufacturers Hartalega Holdings Bhd and Top Glove Corp Bhd's share price drop and amid less-optimistic economic cues from China besides the US and eurozone countries.
At 5pm, the KLCI closed at 1,664.63. Hartalega ended down 24 sen or 4.81% at RM4.75 to become the top decliner, in percentage terms, among the 30 KLCI stocks followed by Top Glove, which fell 14 sen or 3.05% to RM4.45. Major decliners included banking stocks CIMB Group Holdings Bhd and Hong Leong Bank Bhd.
"Banking stocks and glove makers dragged the index down," MIDF Amanah Investment Bank Bhd head of research Mohd Redza Abdul Rahman told theedgemarkets.com.
“Sentiment was negative driven by a slew of lower Gross Domestic Product forecasts from (the) eurozone and China, as well as concerns over key macro indicators such as US job numbers that fell below expectations,” Redza said.
In Malaysia, glove manufacturers' share price could have fallen today amid analyst downgrades and a stronger ringgit against the US dollar.
On Hartalega, Maybank Investment Bank Bhd analyst Lee Yen Ling wrote in a note today that near-term sales could be weaker given the competitive environment and Hartalega’s reluctance in reducing its average selling prices (ASPs).
"Though various strategies are in place to ensure sales volume growth/stable margins, we lower our sales volume expectation in view of the increasingly competitive market," said Lee. She said Maybank Investment downgraded Hartalega shares to sell from hold with a lower target price (TP) at RM4.35 versus RM4.90 previously.
On Top Glove, Kenanga Investment Bank Bhd analyst Raymond Choo Ping Khoon wrote in a note today that Kenanga cut Top Glove's TP to RM4.20 from RM4.45 while maintaining the underperform call for the stock.
"Tell-tale signs like normalising demand, swelling capacities and intensified competition are pointing towards a potential slower set of sequential 2Q19 results. Anecdotal evidence suggest that shorter delivery lead time means strong demand is tapering off coupled with competitive pressure and players ramping up production that could result in further ASP compression and these factors are prompting us to cut our FY19E/20E forecasts by 5%/4%," Choo said.
Source: The Edge
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