Market Daily Report: KLCI ends above 1,400 as Covid-19 treatment trial results spur optimism

KUALA LUMPUR (April 30): The FBM KLCI closed up 27.48 points or 1.99% at 1,407.78 today after broad-based buying lifted share prices across Bursa Malaysia as global investors cheered encouraging early results of a Covid-19 treatment trial.

In Malaysia, analysts and remisiers said, local shares also appeared to take their cue from International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali’s statement on Tuesday that realising the urgent need to tackle the current economic crisis, the government had agreed that the economic sectors that were allowed to operate during phases one, two and three of the movement control order (MCO) period be allowed to raise their operational capacity to the fullest and operate without time limits effective yesterday.

Maybank Investment Bank Bhd remisier Jeffry Azizi Jaafar told theedgemarkets.com: "More businesses have been allowed to operate at full capacity, which creates a positive perception that the MCO relaxation will help boost the slow economy. This measure particularly has a postive impact on technology and semiconductor companies as they get the green light to operate at full capacity and extra hours.”

Across Bursa, turnover stood at 5.852 billion shares valued at RM3.346 billion. Gainers outpaced decliners by 629 to 298 as oil and gas related shares ended higher on crude oil prices.

Top active stocks included Sapura Energy Bhd and Bumi Armada Bhd. Bursa’s energy index, which tracks oil and gas related shares, closed up 35.86 points or 5.42% at 687.98.

Across Bursa, top gainers included KLCI stocks Petronas Chemicals Group Bhd and Kuala Lumpur Kepong Bhd.

Global equity and crude oil prices rose. It was reported that Asian stocks rose to a seven-week high today, though bonds and currencies stuck to cautious ranges ahead of a European Central Bank (ECB) meeting later in the day. Optimism in equity markets was driven by positive partial results of a trial of Gilead's antiviral remdesivir, which showed the drug could help speed recovery from Covid-19, the respiratory disease caused by the new coronavirus.

Oil prices jumped today, extending steep gains in the previous session on signs the US crude glut was not growing as quickly as expected and that gasoline demand battered by Covid-19 restrictions was starting to pick up. West Texas Intermediate (WTI) crude futures climbed to a high of US$17.35 (RM74.60) a barrel and were up 14.3%, or US$2.15, at US$17.21 at 0350 GMT. The US benchmark surged 22% yesterday. Brent crude rose 10.3%, or US$2.33, to US$24.87 a barrel in light trading, with the June contract expiring today. The contract hit a high of US$24.91 earlier in the session, having posted a 10% gain yesterday, Reuters reported.

Malaysian markets will be closed for the Labour Day holiday tomorrow. Trading resumes on Monday.


Source: The Edge

Market Daily Report: Oil price rise spurs equity gains as corporate results trickle in

KUALA LUMPUR (April 29): The FBM KLCI closed up 8.1 points or 0.59% at 1,380.3 after broad-based buying as investors weighed factors including higher crude oil prices and Malaysia corporate financial results against the COVID-19 pandemic’s impact on the world economy.


At a glance, Malaysian shares also appeared to take cue today from International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali’s statement yesterday that realising the urgent need to tackle the current economic crisis, the Government has agreed that the economic sectors that were allowed to operate during phases one, two and three of the Movement Control Order (MCO) be allowed effective today to raise their operational capacity to the fullest and to operate without time limits.

Across Bursa at 5pm today, a total of 4.825 billion shares valued at RM2.464 billion were traded. There were 630 gainers and 248 decliners as investors evaluated financials of companies including Sapura Energy Bhd and Lotte Chemical Titan Holding Bhd. Both companies announced their financial results earlier today.

Malaysia’s corporate financial reporting season for the January to March quarter starts as early as April although most companies announce their results in May.

"Oil prices will likely remain low. We expect the Brent spot price to average US$35 per barrel and West Texas Intermediate (WTI) spot to average US$30 per barrel for this year. Oil prices will likely move up in 2021 as demand recovers along with economic growth. For 2021, we forecast Brent to average US$45 per barrel and WTI to average US$40 per barrel,” Moody’s Investors Service analysts wrote in a note.

"Global integration within the world economy will likely shift. For example, the coronavirus shock has created supply chain disruptions and could also fundamentally change consumption patterns, which could lead to a large-scale reorganisation of economies over time,” they said.

Across Bursa today, top gainers included KLCI stocks Hong Leong Financial Group Bhd and Kuala Lumpur Kepong Bhd.

Most active stocks included Sapura Energy and Notion VTec Bhd.
Notion VTec, which registered a volume of some 112 million shares, closed up 24.5 sen or 29.34% at RM1.08.

Notion VTec's share price rose today after the hard disk drive manufacturer said yesterday its wholly-owned subsidiaries Notion Venture Sdn Bhd and Notion International (M) Sdn Bhd, which had previously received approval letters from the Ministry of International Trade and Industry (MITI) to operate during the MCO, will ramp up  operations to full capacity effective today.

"Subsequent to the meeting of the National Security Council, those economic sectors which were previously approved by MITI to operate during the MCO period is now allowed to ramp up their operations to full capacity starting 29 April 2020. The company will ensure that the established standard of operating procedure is being complied,” Notion VTec said.

Globally, it was reported that Asian shares climbed to a near two-month peak on Wednesday as investors took heart from easing coronavirus lockdowns in some parts of the world, better-than-expected corporate earnings and a welcome rebound in oil prices.

It was reported that US oil prices gained on Wednesday, trimming some of this week's losses, after US stockpiles rose less than expected and on expectations demand will improve as some European countries and US cities moved to ease coronavirus lockdowns.

"US WTI crude futures were up 12.6%, or US$1.56, at US$13.91 at 0643 GMT, paring a 27% plunge over the first two days of this week. Earlier in the session, WTI futures jumped by more than 15% to a session high of US$14.40. Brent crude futures rose 3.1%, or 64 cents, to US$21.10 a barrel, adding to a 2.3% gain on Tuesday.

"US crude inventories rose by 10 million barrels to 510 million barrels in the week to April 24, data from industry group the American Petroleum Institute showed on Tuesday, compared with analysts' expectations for a build of 10.6 million barrels,” Reuters reported.



Source: The Edge

Market Daily Report: Bursa energy index falls most as oil sinks amid dwindling storage room

KUALA LUMPUR (April 28): The FBM KLCI closed up 2.04 points or 0.15% at 1,372.20 today after erasing intraday losses as crude oil’s price drop fuelled uncertainty in world markets already laden with Covid-19 pandemic concerns.

Bursa Malaysia’s energy index, which tracks oil and gas companies’  shares, fell the most among the exchange’s indices on news oil prices slumped again today amid concern about dwindling capacity to store crude oil worldwide, heightened by fears that fuel demand may be slow to pick up once countries ease curbs imposed on business and social life to combat the Covid-19 pandemic.

It was reported that US West Texas Intermediate crude futures fell to as little as US$10.64 (RM46.44) a barrel today, and were off 12.8%, or US$1.64, at US$11.14 a barrel as of 0635 GMT after plunging 25% yesterday.

"Brent crude futures fell to a low of US$18.85 and were last down 4.3%, or 85 US cents, to US$19.14 a barrel. The benchmark slid 6.8% on Monday, and the contract for June delivery expires on April 30,” Reuters reported.

CGS-CIMB analysts wrote in a note today that the US Energy Information Administration had estimated the capacity of the Cushing oil storage hub to be 76 million barrels. However, US crude oil inventories have increased over the past four weeks, by about 16 million barrels per week, and by April 17, approximately 60 million of the 76 million barrel storage capacity had been filled, with some of the remaining storage already leased or committed.

The CGS-CIMB analysts said the situation left even less space for contract holders with no existing arrangement for storage.

"So, the storage problem is expected to persist until production is further reduced,” they said.
Across Bursa at 5pm today, 5.02 billion shares had been traded for RM2.49 billion. There were 305 gainers and 548 decliners across the exchange.

The KLCI ended up at 1,372.20 after falling to its intraday low at 1,367.44.
Bursa’s energy index closed down 17.42 points or  2.63% at 646.01 as oil and gas-related firms ended among the bourse’s most-active stocks.

The list included Velesto Energy Bhd and Sapura Energy Bhd.
Sapura Energy, which registered a volume of some 86 million shares, ended down half a sen or 5.88% at eight sen.



Source: The Edge

Market Daily Report: KLCI trails ACE Market rise as BOJ stimulus buoys world shares

KUALA LUMPUR (April 27): The FBM KLCI closed up 0.31 point or 0.02% at 1,369.85 today while Bursa Malaysia’s ACE Market index rose by a significantly larger quantum, as world equities responded to news that the Bank of Japan (BOJ) expanded monetary stimulus and pledged to buy an unlimited amount of bonds to mitigate the economic impact of the Covid-19 pandemic.

In Malaysia, analysts said the local stock market will take cue from the country’s Movement Control Order (MCO) and global crude oil prices.

Across Bursa at 5pm, 5.18 billion shares were traded for RM2.24 billion across the exchange. There were 469 gainers and 369 decliners.

The ACE Market index closed up 138.95 points or 3.12% at 4,588.13 to be the largest percentage gainer across the exchange.

The KLCI ended up 0.31 point or 0.02% at 1,369.85 after rising to its intraday high at 1,378.40. At a glance, the KLCI pared gains at 5pm after a sharp drop in the final trading hour.

"The local market is likely to fall back into profit-taking consolidation mode this week, given the softening trend momentum following last week's correction after rallying to five-week highs. Sentiment-wise, with potential for further extension on top of the two-week extension on the MCO to May 12, more evidence of a sustained contraction in daily domestic Covid-19 infection rates and further oil price recovery from record lows will be crucial to extend (Malaysia shares’) recovery ahead,” TA Securities Holdings Bhd wrote in a note today.

Across Bursa, top gainers included Sinotop Holdings Bhd and Chemical Co of Malaysia Bhd.
Leading decliners included KLCI stocks Petronas Dagangan Bhd and Tenaga Nasional Bhd.
Top decliner Petronas Dagangan closed down 56 sen or 2.76% at RM19.74.

Globally, it was reported that Asian shares bounced on Monday as the BOJ announced more stimulus steps to help cushion the economic impact of the coronavirus, but the recent weak run in the global oil price showed no signs of ending.

It was reported that to ease corporate funding strains, the BOJ said it will boost by three-fold the maximum amount of corporate bonds and commercial debt it buys to 20 trillion yen.

The central bank was also quoted as clarifying its commitment to buy unlimited amounts of government bonds by scrapping loose guidance to buy them at an annual pace of 80 trillion yen.
"The BOJ will purchase necessary amounts of government bonds without setting an upper limit" to keep long-term interest rates around its 0% target, Reuters quoted the BOJ’s statement as saying.



Source: The Edge

Market Daily Report: Glove shares up as Covid-19 drug development doubt rattles sentiment

KUALA LUMPUR (April 24): The FBM KLCI closed down 11.79 points or 0.85% at 1,369.85 today with Asian stock indices, spurred by doubts about the progress in the development of drugs to treat Covid-19 patients. Such sentiment, however, led to gains in rubber glove manufacturers' share prices, in anticipation lingering Covid-19 concerns will result in higher demand for gloves.

Across Bursa Malaysia at 5pm today, 4.69 billon shares were traded for RM2.49 billion. There were 445 gainers and 400 decliners across the exchange, as news Gilead Sciences Inc's antiviral drug Remdesivir which had failed to help severely ill Covid-19 patients in its first clinical trial, hit global stock market sentiment.

"Any piece of bad news is likely to rattle the market," New York-based wealth management firm Inverness Counsel chief investment strategist Tim Ghriskey was quoted as saying by Reuters.
Across Bursa, top decliners included Heineken Malaysia Bhd, besides KLCI stocks MISC Bhd and Tenaga Nasional Bhd.

Top gainers included glove makers Top Glove Corp Bhd, Kossan Rubber Industries Bhd and Supermax Corp Bhd.

Most active stocks included glove producer Careplus Group Bhd, which registered a trading volume of some 137 million shares. Its share price closed up 5.5 sen or 14.67% at 43 sen.
Bursa’s healthcare index, which includes glove manufacturers, ended up 28.73 points or 2.02% at 1,449.77, to be the leading gainer among Bursa indices.



Source: The Edge

Market Daily Report: Equities erase gains after rising with crude oil prices

KUALA LUMPUR (April 23): The FBM KLCI closed down 0.25 point or 0.02% at 1,381.64 today, after erasing gains in volatile trade. The volatility stems from optimism as equities rose with crude oil prices at above UDS$20 a barrel and as investors continued to be mindful of the Covid-19 pandemic’s impact on world economy.

Across Bursa Malaysia at 5pm, a total of 5.05 billion shares were traded for RM2.58 billion. There were 462 gainers and 376 decliners.

"The local market should bounce back along with the rebound on overnight Wall Street and oil markets, but sentiment may still be clouded by concerns over the negative economic impact from the oil price collapse and continued lockdowns in neighbouring countries,” TA Securities Holdings Bhd wrote in a note earlier today.

At Bursa, volatile trades today saw the KLCI rising to its intraday high at 1,395.34, before falling to its intraday low at 1,378.78. The KLCI ended lower, after profit taking in the final trading hour.
Across Bursa, top decliners included KLCI stocks Hong Leong Financial Group Bhd and Tenaga Nasional Bhd.

Top active stocks included oil and gas-related Sapura Energy Bhd, which saw some 92 million shares traded. Sapura Energy’s share price closed up 0.5 sen or 5.88% at nine sen.

Bursa’s energy index, which tracks shares of oil and gas companies, ended up 10.10 points or 1.51% at  679.17, as global shares rose with crude oil prices.

Reuters reported Asian stock markets rose on Thursday, as the combination of a rebound in crude prices from historic lows and the promise of more U.S. government aid to cushion the coronavirus-ravaged economy, helped calm nervous markets.

It was reported better-than-expected U.S. corporate earnings also lifted equities, though overall sentiment remained fragile as the pandemic cut a destructive path through the world economy.
Oil surged on Thursday, amid signs that producers are cutting production to weather a collapse in demand, as the coronavirus outbreak ravages world economies, while the U.S. state of Oklahoma also moved to help oil firms pump less.

Analysts warned the rise could be temporary as storage tanks fill around the world, but prices recovered ground, as investors reassessed the resilience of the world's economy amid the global health emergency.

"Brent crude was up 99 cents or 15% at US$21.36 a barrel by 0506 GMT, after rising more than 5% on Wednesday. U.S. West Texas Intermediate (WTI) futures were up 98 cents or more than 7% at US$14.76 a barrel, having risen around a fifth in the previous session. U.S. crude futures fell to below minus US$40 on Monday, on concerns that buyers were running out of storage space to take deliveries,” Reuters reported.


Source: The Edge

Market Daily Report: Rubber glove shares rise as oil prices fall into a seemingly bottomless pit

KUALA LUMPUR (April 22): The FBM KLCI closed up 0.16 point at 1,381.89 today after erasing losses with Asian share indices as investors weighed the economic impact of crude oil prices at below US$20 a barrel and as nations contend with the Covid-19 pandemic. Rubber glove manufacturers' share prices rose against such sentiment.

At 5pm, the KLCI closed up at 1,381.89 after falling to its intraday low at 1,359.54.
Across Bursa Malaysia, 5.1 billion shares worth RM2.85 billion were traded. Leading gainers included KLCI-linked rubber glove manufacturers Top Glove Corp Bhd and Hartalega Holdings Bhd.
Top Glove’s share price closed up 35 sen or 5.38% at RM6.85, while Hartalega rose 32 sen or 4.41% to RM7.57, as the Covid-19 pandemic leads to expectation of higher demand for rubber gloves.
Covid-19 has however led to demand destruction in other sectors including crude oil markets, as the outbreak prompted countries to impose movement restrictions to curb the pandemic.

Such crude oil sentiment does not bode well for global share markets. Reuters reported Asian share markets were on the defensive on Wednesday, as the floor fell out from under crude prices, sparking worries about further turmoil in the energy sector, already reeling from the heavy blow from global shutdowns.

It was reported the dizzying dive in oil has turned investors away from stocks to the safety of high-grade bonds, with short-term U.S. Treasuries yields edging down near record low levels.

Across crude oil markets, it was reported that oil prices slumped again on Wednesday, with Brent falling to the lowest since 1999 as the market struggled with a massive crude glut, amid a collapse in demand for everything from gasoline to jet fuel caused by the coronavirus outbreak.

It was reported that Brent crude, which fell 24% in the previous session, touched US$15.98 a barrel, its lowest since June 1999. It was reported Brent was trading down US$2.37, or 12%, at US$16.96 at 0511 GMT. It was reported that West Texas Intermediate (WTI) was down 51 cents or 4.4% at US$11.06 a barrel.

"The falls follow two of the wildest days in the history of oil trading, as worldwide supply looks set to overwhelm demand for months to come and current production cuts fall far short of offsetting that glut. The front-month U.S. contract fell into negative territory for the first time in history on Monday and set a record for the number of contracts traded on Tuesday,” Reuters said.

In Malaysia today, Hong Leong Investment Bank Bhd analyst Sheikh Abdullah wrote in a note that the price action is not entirely reflective of the supply — demand dynamics but rather due to settling mechanism of the WTI contract, compounded further by low open offers for the said contract.
"We are monitoring the situation as prices for Brent has also started to parallel WTI’s moves in the market. The bottom-line is that this phenomenon spells out quite clearly that there are no takers for oil i.e. demand, in the global markets.

"As prices continue to head south, we reckon Petronas’ commitment to maintain its domestic capex (capital expenditure) could also be in jeopardy. For now, we are keeping our oil price assumption of US$47/bbl for 2020 on the premise of some recovery in demand in 2H20, against the backdrop of the announced production cuts,” Sheikh Abdullah said.

At the time of writing this theedgemarkets.com report, Petronas had not issued a statement in response to Hong Leong’s opinion on Petronas’ capex.

Petronas has however indicated in its Covid-19 response statement that it will continue to drive operational efficiencies and commercial excellence, while maintaining fiscal discipline in facing the immediate impact and anticipated headwinds of the Covid-19 pandemic, as well as the steep drop in oil prices. 


Source: The Edge

Market Daily Report: Malaysia shares roiled after US crude oil futures fall below zero

KUALA LUMPUR (April 21): The FBM KLCI closed down 31.39 points or 2.22% at 1,381.73 today, while Bursa Malaysia’s energy index fell by a significantly larger quantum, after prices of US crude oil futures fell below zero for the first time in history.

Anticipation of Malaysia’s corporate financial reporting season for the January to March quarter is also seen influencing share trades, as investors evaluate the extend of the Covid-19 pandemic’s impact on businesses.

Across Bursa at 5pm, 6.53 billion shares were traded for RM2.94 billion. There were 827 decliners and 198 gainers, after broad-based selling across the exchange where all indices ended lower.
The energy index, which tracks prices of oil and gas companies’ shares, fell the most after the gauge dropped 43.48 points or 6.05% to 674.87.

"The overnight slide on Dow (Jones Industrial Average) and oil prices, coupled with technically overbought market, are likely to witness KLCI in wild swings today (range bound within 1378-1419 band). We reiterate our view that the recent relief rally would be an opportune time to take profit in this market rally, as we roll into May and the economic reality, coupled with the concerns about weaker corporate earnings should start to emerge moving forward,” Hong Leong Investment Bank Bhd wrote in a note earlier today.

Malaysia’s corporate financial reporting season for the January-to-March quarter starts as early as April, although most companies announce their earnings in May.

Overnight, it was reported that traders desperate to avoid owning oil fled the markets on Monday, sending crude futures into negative territory for the first time ever, in recognition that the coronavirus pandemic has sapped demand for fuel and there is not enough storage for the massive glut of oil present on U.S. soil.

It was reported that investors sold the May futures contract due to expire on Tuesday, in a series of waves. It was reported that at one point, the contract hit negative US$40.

"When the trading stopped, crude oil had ended the day at a negative US$37.63 a barrel, a decline of some 305% or US$55.90 a barrel.

"Wall Street tumbled on Monday, after U.S. crude futures turned negative for the first time ever, with traders forced to pay to unload crude, as the May contract expired during a global economic slump unleashed by the coronavirus outbreak. The S&P energy index tumbled 3.7%, after the front-month May U.S. West Texas Intermediate contract actually turned negative, with sellers offering US$37.63 a barrel to any traders willing to take it,” Reuters said.

Across Bursa today, top decliners included KLCI stocks Petronas Dagangan Bhd, Public Bank Bhd and Hartalega Holdings Bhd.

Most active stocks included oil and gas-related Velesto Energy Bhd and Hibiscus Petroleum Bhd, the prices of which declined in active trade.

Velesto closed down one sen or 6.25% at 15 sen, with some 247 million shares traded. Hibiscus fell four sen or 8.6% at 42.5 sen, with about 166 million shares transacted.



Source: The Edge

Market Daily Report: AirAsia X, MSM volume spike spurs Bursa share trade

KUALA LUMPUR (April 20): The FBM KLCI closed up 5.78 points or 0.41% at 1,413.12 today with Asian share indices, after China cut its benchmark lending rate by 20 basis points to 3.85% and as investors weighed the progress in the global effort to curb the Covid-19 pandemic.

Meanwhile, share trade across Bursa Malaysia received support from AirAsia X Bhd, AirAsia Group Bhd and MSM Malaysia Holdings Bhd's volume rise. At 5pm, Bursa saw 5.99 billion shares traded for RM3.21 billion across the exchange. There were 504 gainers versus 434 decliners.

On the KLCI, TA Securities Holdings Bhd wrote in a note today that while short-term technical momentum has turned overbought due to last week's index rally to a fresh five-week high, trend momentum registered significant improvement to imply potential reversal from the prior downtrend.
"Meantime, further improvement in the domestic Covid-19 outbreak situation with lower daily infection rates, and hopes for gradual easing on lockdowns in global virus epicentres where infections are deemed to be peaking, should bode well for sentiment and sustain recovery momentum ahead,” TA said.

Globally, it was reported that most Southeast Asian stock markets rose on Monday, with Malaysia leading gains, as China, the region's prime trading partner, cut a key interest rate and promised more measures to prop up an economy battered by the coronavirus pandemic.

"China cut its benchmark lending rate by 20 basis points to 3.85% on expected lines and said it would roll out additional policies to prevent short-term economic shocks from becoming long-term stagnation trends. Data on Friday showed that the world's second largest economy shrank 6.8% in the first quarter from a year earlier, its first contraction since at least 1992, due to the tough measures put in place to contain the outbreak,” Reuters reported today.

At Bursa today, notable share trades were seen in AirAsia X, AirAsia Group and MSM.
Top active stock AAX ended with some 484 million shares traded, while AirAsia Group saw about 173 million shares transacted. AAX’s share price closed up 4.5 sen or 56.25% at 12.5 sen, while AirAsia Group rose 8.5 sen or 10.83% to 87 sen today, after the budget airline said on Friday that it is set to resume its scheduled domestic flights, following a thorough review on its operations in light of the Covid-19 pandemic.

At sugar producer MSM today, the stock’s price closed up 18.5 sen or 44.58% at 60 sen, with some 154 million shares traded.

MSM told theedgemarkets.com today that there has been no new announcements on the company, and that the increase in its share price today was "purely a market play.”

AAX and MSM’s share trade volume spiked today from Friday’s (April 17) figures at about 108 million and 17 milion shares respectively.



Source: The Edge

Market Daily Report: FBM KLCI closes above 1,400 level on optimism of US kickstarting economic activity

KUALA LUMPUR (April 17): The FBM KLCI rose actively today to close over the 1,400 level after more than one month, tracking regional gains amidst optimism on US plans to resume economic activities as it works to contain the Covid-19 spread.

At 5pm, the benchmark index, which had been trading in green territory throughout the day, closed 20.81 points or 1.5% higher at 1,407.34, with a high volume of 6.31 billion shares worth RM3.02 billion.

Market breadth was positive with 660 gainers against 222 losers.

The list of top gainers was dominated by consumer stocks such as Dutch Lady Milk Industries Bhd, Panasonic Manufacturing Malaysia Bhd, Carlsberg Brewery Malaysia Bhd, British American Tobacco (Malaysia) Bhd, and Heineken Malaysia Bhd.

Malacca Securities Sdn Bhd senior analyst Kenneth Leong said the FBM KLCI advanced alongside gains across its regional peers following US plans to gradually reopen economic activities amid signs of a flattening of the Covid-19 cases curve.

“The positive news has also override the weakness in China economics data that saw 1Q2020 gross domestic product (GDP) sank -6.8% y-o-y, marking the first contraction since 1992,” he told theedgemarkets.com.

Should the FBM KLCI stay afloat the 1,400 psychological level, Leong said there could be recovery extending towards the 1,455 level over the near term.

“However, we do caution that the sluggish crude oil prices and the persistent selling from foreign funds may leave gains to be measured,” he added.

Trading was largely positive in the region, with the Nikkei 225 index advancing 3.15% to 19,897 points, while South Korea’s Kospi index rose 3.09% to 1,914.53 points. In China, the Hang Seng index climbed 1.56% to 24,380 points while the Shanghai Composite index rose 0.66% 2,838.49 points.

Reuters said Asian stocks gained on Friday as President Donald Trump's plans to gradually re-open the US economy offset data that showed China suffered its worst economic contraction on record due to the coronavirus outbreak.



Source: The Edge

Market Daily Report: Final hour plunge lands KLCI in the red

KUALA LUMPUR (April 16): The FBM KLCI closed down 1.26 points or 0.09% at 1,386.53 today after a final hour plunge on profit taking, as investors weighed the impact of the Covid-19 pandemic on the global economy and corporate earnings.

At 5pm, Bursa Malaysia registered a trade volume of 4.83 billion shares valued at RM2.67 billion. There were 624 gainers and 253 decliners.

Reuters quoted J.P. Morgan Asset Management global market strategist Kerry Craig as saying “markets are looking for the peak in the viral spread, but this is only the start of a very bumpy road back to economic strength.”

"Investors should remain vigilant to what the market is pricing and realise that market rallies in a longer bear market are not unusual,” Craig said.

At Bursa today, the KLCI rose to its intraday high at 1,398.53, before a final hour plunge landed the index in the red, when market closed. Across the exchange, top gainers included Rubberex Corp (M) Bhd, while leading decliners included Kuala Lumpur Kepong Bhd and PPB Group Bhd. Most-active stocks included Dagang NeXchange Bhd.

Dagang NeXchange ended with a volume of some 115 million shares. It share price closed up 2.5 sen or 19.23% at 15.5 sen.

Globally, it was reported Asia's stock markets retreated from their highest levels for a month and the dollar extended gains on Thursday, as the damage the coronavirus has wrought on the world economy soured appetite for risk.

It was reported data showed U.S. retail sales fell the most on record last month and manufacturing output fell by the most in 74 years, raising fears of a deep recession.

"Another sky high figure is expected, when U.S. weekly jobless claims land later in the day.
"E-mini futures for the S&P 500 fell half a percent in Asia, after a 2.2% drop on the index on Wednesday and European futures were marginally lower. MSCI’s broadest index of Asia-Pacific shares outside Japan lost about 1%, wiping out early week gains that had taken the index to its best level since mid-March,” Reuters reported.



Source: The Edge

Market Daily Report: KLCI finishes up 1.18% as IMF report adds perspective to Covid-19-driven markets

KUALA LUMPUR (April 15): The FBM KLCI closed up 16.13 points or 1.18% at 1,387.79 today while share trade volume across Bursa Malaysia rose past five billion units, as markets took cue from factors including US equities’ Tuesday overnight rise and after the US Department of Justice (DoJ) said it repatriated to Malaysia some US$300 million (RM1.292 billion) in additional funds misappropriated from 1Malaysia Development Bhd (1MDB).

The International Monetary Fund's (IMF) latest World Economic Report, which included forecast for Malaysia’s gross domestic product (GDP) and unemployment rate, may have also influenced Malaysia share trades today as the fund weighed the economic impact of the Covid-19 pandemic.
Across Bursa Malaysia today, 5.54 billion shares worth RM2.73 billion were traded. There were 535 gainers and 373 decliners across the exchange. Top gainers included shares of Bursa Malaysia Bhd, Yinson Holdings Bhd and Malaysia Airports Holdings Bhd.

TA Securities Holdings Bhd wrote in a note today: "Further signs of stability on the Covid-19 outbreak, less dire economic and corporate numbers and recovery in global oil prices will be crucial to sustain further gains from current (KLCI) levels.”

Hong Leong Investment Bank Bhd wrote in note today: "In the wake of overnight strong Dow performance and signs of the coronavirus outbreak peaking in certain hotspots in the world, KLCI could creep higher to retest 1,400 zones before the next meaningful pullback begins. Nevertheless, we reiterate sell into rally as the risk-to-reward perspective is getting more risky amid IMF’s bearish global economic outlook and sluggish oil prices, coupled with the negative impact on Malaysia’s 2020 GDP and corporate earnings due to possibility of further MCO (Movement Control Order) extensions, and a greater degree of relaxation will only happen when new Covid-19 cases sustainably fall below 50 (from the current 150-200 range).”

The IMF said in the summary of its latest World Economic Report that the Covid-19 pandemic is inflicting high and rising human costs worldwide, and the necessary protection measures are severely impacting economic activity. As a result of the pandemic, the global economy is projected to contract sharply by –3% in 2020, much worse than during the 2008–09 financial crisis, according to the IMF.
"In a baseline scenario — which assumes that the pandemic fades in the second half of 2020 and containment efforts can be gradually unwound — the global economy is projected to grow by 5.8% in 2021 as economic activity normalises, helped by policy support,” the IMF said.

According to the IMF’s report, Malaysia’s economy is expected to contract 1.7% in 2020 before growing 9% in 2021. The IMF said Malaysia’s unemployment rate is expected to reach 4.9% in 2020 before improving to 3.4% in 2021.

US equities' rise and the DoJ’s 1MDB-linked updates on Tuesday also made news. In the stock market, it was reported that the Dow Jones Industrial Average closed up 558.99 points, or 2.39%, at 23,949.76, the S&P 500 gained 84.43 points, or 3.06%, to 2,846.06 and the Nasdaq Composite added 323.32 points, or 3.95%, to 8,515.74.

Meanwhile, the DoJ announced on Tuesday (April 14) that it repatriated to Malaysia about US$300 million in additional funds misappropriated from 1MDB and laundered through financial institutions in several jurisdictions, including the US, Switzerland, Singapore and Luxembourg.

"Combined with other funds that the department previously returned to Malaysia in May 2019, the US has returned or assisted Malaysia in recovering over US$600 million of funds misappropriated from 1MDB. The department’s efforts to recover funds misappropriated from 1MDB are continuing,” the DoJ said in a statement.



Source: The Edge

Market Daily Report: Respite for stocks as China exports fall less than expected

KUALA LUMPUR (April 14): The FBM KLCI closed up 15.63 points or 1.15% at 1,371.66 today, while Bursa Malaysia’s ACE Market index rose by a significantly higher quantum as investors weighed updates on China’s March 2020 exports, which fell less than expected and as global economies mitigate the impact of the Covid-19 pandemic. Crude oil price gains also appeared to support Malaysia share market sentiment.

It was reported that Asian equities extended gains on Tuesday, after China's trade data came in better than expected and as some nations tried to restart their economy by partly lifting restrictions aimed at containing the coronavirus outbreak. "Market sentiment was boosted by data showing China's exports in March fell only 6.6% from the year-ago period, smaller than the expected 14% plunge. Imports eased a modest 0.9%, compared with expectations for a 9.5% drop,” Reuters reported.
Across Bursa at 5pm , 4.79 billion shares were traded for RM2.08 billion. There were 706 gainers and 203 decliners.

Among Bursa indices, the ACE Market index closed up the most, after rising 261.12 points or 6.51% to 4,272.13, amid broad-based buying across the exchange.

On the KLCI, MIDF Amanah Investment Bank Bhd is forecasting the index to end this year at 1,400 points, from the previously-estimated 1,480, on expectation of Malaysia’s slower economic growth, as measured by gross domestic product (GDP), and after taking into account analysts’ earnings estimates for KLCI-linked companies.

In a note today, MIDF strategy head Kifni Kamaruddin said that in light of Malaysia’s movement control order (MCO) extension and the likelihood some restrictions will remain in place even after the MCO ends, MIDF revised its Malaysia GDP growth forecast for 2020 to 1%, from 2.7% previously.

"In line with (i) the downward revision (as above stated) to our GDP target for this year, and (ii) the diminution in (Bloomberg) consensus EPS20 estimate for the KLCI to 90.6 points currently (from 95.6 points at the onset of the Covid-19 crisis), we thereby cut our KLCI year-end 2020 baseline target (from 1,480 points) to 1,400 points, while maintaining our PER20 valuation target of 15.5x, which equates to -2.0SD (standard deviation) of its five-year (2014-18) historical average. As it turned out, the KLCI has since rebounded by as high as 111 points, buoyed by (i) the hope of ‘flattening curve’ (i.e. the number of active cases in Malaysia is showing sign of plateauing), and (ii) a series of stimulus announcements totalling RM260 billion,” Kifni said.

Across Bursa today, top gainers included KLCI stocks Malaysia Airports Holdings Bhd and Petronas Chemicals Group Bhd. Top active stocks included Bumi Armada Bhd and Hibiscus Petroleum Bhd, as investors took cue from crude oil price gains.

Bumi Armada registered a volume of some 81 million shares. The stock closed up 0.5 sen or 2.94% at 17.5 sen.

Across crude oil markets, it was reported oil prices rose around 1% on Tuesday, after the U.S. Energy Information Administration predicted shale output in the world's biggest crude producer would fall by a record amount in April, adding to cuts from other major producers. It was reported that Brent futures rose 40 cents or 1.3% to US$32.14 a barrel by 0638 GMT, after settling 0.8% higher on Monday. U.S. West Texas Intermediate (WTI) crude was up 15 cents or 0.7% at US$22.56, having dropped 1.5% the previous session.

"The Organization of the Petroleum Exporting Countries, along with Russia and other producing countries — known as OPEC+ — agreed over Easter to cut output by 9.7 million barrels per day (bpd) in May and June, equal to about 10% of global supply before the viral outbreak. The United States, the world's biggest producer, is reducing output as well, and other countries are taking the estimated cut in production to about 19.5 million bpd.

"But analysts, oil industry executives and others say no matter how the numbers are massaged, the reduction will not be enough to match a contraction of around a third of global oil demand, due to the outbreak,” Reuters said.



Source: The Edge

Market Daily Report: KLCI down, Bursa healthcare index rises the most

KUALA LUMPUR (April 13): The FBM KLCI closed down 1.47 points or 0.1% at 1,356.03 today, while rubber glove manufacturers’ share price gained, following global updates on the rising number of Covid-19 pandemic cases and higher death toll from the outbreak.

At 5pm, the KLCI closed down at 1,356.03, after erasing gains in the final trading hour. During the day, the KLCI had fallen to its intraday low at 1,352.78, before rising to its intraday high at 1,359.68.
Rubber glove manufacturers’ share price rise had partly helped Bursa Malaysia’s healthcare index become the top gainer among Bursa indices. Among rubber glove manufacturers, Top Glove Corp Bhd’s share price closed up 17 sen or 2.62% at RM6.67. Top Glove had earlier today risen to its all-time high at RM6.83.

Bursa’s healthcare index, which tracks share prices of rubber glove manufacturers, pharmaceutical companies and hospital operators ended up 20.65 points or 1.55% at 1,349.01.

Pharmaniaga Bhd’s share price added nine sen or 5.84% to RM1.63, while IHH Healthcare Bhd rose two sen or 0.39% to RM5.11.

Across Bursa, 3.12 billion shares worth RM1.51 billion were traded. There were 307 gainers and 497 decliners, as the stock market also took cue from the Organization of the Petroleum Exporting Countries and its allies including Russia — a group known as OPEC+’s agreement to reduce crude oil output and support prices of the commodity.

"After a tortuous series of meetings, the OPEC+ group finally announced a 9.7 million barrels per day (bpd) production cut. US, China and Brazil will add another 3.7 million bpd of cuts, while G20 nations are expected to chip in with an additional 1.3 million bpd of cuts.

While the production cut headline looks impressive, details are not forthcoming and there are widespread concerns over compliance to the production cuts,” UOB Group markets strategy head Heng Koon How and markets strategist Quek Ser Leang wrote in a note today.

"The intensifying Covid-19 outbreak is expected (to) trigger a deep global recession in 1H20 and will likely result in an unprecedented drop in global energy demand. The EIA (US Energy Information Administration) has warned that global energy surplus could jump in excess of 15 million bpd by April 2020. As such, we maintain our negative outlook for Brent crude oil. At most, the latest OPEC+ production cut may put a near term floor in Brent crude oil at around USD 25/bbl, but it will not change the dire demand-supply dynamics in the coming quarters,” they said
.
Reuters reported more than 1.8 million people have been reported to be infected by the novel coronavirus globally and 113,849 have died, according to a Reuters tally. Infections have been reported in more than 210 countries and territories, since the first cases were identified in China in December 2019, it said.


Source: The Edge

Market Daily Report: Shares down as OPEC+ planned oil output cut dissappoints, Malaysia extends MCO

KUALA LUMPUR (April 10): The FBM KLCI ended 12.26 points or 0.9% lower at 1,357.5 today after the Organization of the Petroleum Exporting Countries and its allies, including Russia - a group known as OPEC+ - agreed to reduce crude oil output by a smaller quantum than what the market was anticipating.

Such sentiment had hurt crude oil prices and shares of oil and gas-related companies.
Fund managers said Malaysia equities could have also ended lower today on negative sentiment over the extension of Malaysia's movement control order (MCO) until April 28 to curb the COVID-19 pandemic.

“It is possible that there is a low sentiment issue as a result of the extension of the MCO. However, another issue is the production cut by OPEC+ as the market does not think it is enough,” Areca Capital Sdn Bhd chief executive officer Danny Wong told theedgemarkets.com.

It was reported that oil producers in the OPEC+ group, led by Saudi Arabia and Russia, were expected to pressure Mexico on Friday to seal an accord for a collective cut in output of 10 million barrels per day, before asking other nations for a further 5 million bpd of cuts. The United States has encouraged global cooperation to bolster an oil market that collapsed as the coronavirus pandemic accelerated in March and producers resorted to a price war after failing to agree on how to prop up prices.

"Oil prices tumbled on Thursday despite OPEC+ nearing agreement as the lockdowns ordered across the world sucked life out of the global economy, and traders reckoned that even a combined reduction of 15 million bpd would be too little to stabilise the market. Markets were closed for the Good Friday holiday in major centres. But on Thursday, Brent oil prices, which hit an 18-year low last month, were trading around US$32 a barrel, half their level at the end of 2019,” Reuters reported today.
In Malaysia, the MCO, which was initially scheduled between March 18 and 31, requires non-essential businesses to stop operations, while the public has been ordered to stay at home to curb the COVID-19 outbreak.

On March 25, Prime Minister Tan Sri Muhyiddin Yassin said the government decided to extend the MCO until April 14, because updates from the National Security Council and Health Ministry indicated an increase in COVID-19 cases. Today, Muyiddin said the Government has decided to extend the MCO to April 28.

Across Bursa Malaysia today, 3.72 billion shares worth RM1.68 billion were traded as O&G counters Hibiscus Petroleum Bhd, Bumi Armada Bhd and Sapura Energy Bhd ended as the top three most actively traded stocks.

Top active stock Hibiscus registered a volume of some 171 million shares. The stock closed down three sen or 5.71% at 49.5 sen.



Source: The Edge

Market Daily Report: KLCI rises as hopes of global crude oil output cut spurs O&G shares

KUALA LUMPUR (April 9): The FBM KLCI closed up 8.37 points or 0.61% today at 1,369.76 as Bursa Malaysia oil and gas (O&G) shares rose with crude oil prices, on expectation that major producers of the commodity will agree to cut output.

Investors are anticipating a truce in the Saudi Arabia-Russia crude oil price war, which has increased supply of the commodity and sent prices lower. The price war does not help crude oil markets at a time when the Covid pandemic has led to expectation of lower demand for crude oil and generated economic uncertainty.

At 5pm today, Bursa saw 4.71 billion shares traded for RM2.25 billion. There were 634 gainers versus 252 decliners, as O&G shares Bumi Armada Bhd, Sapura Energy Bhd and Hibiscus Petroleum Bhd topped Bursa’s most active list.

Top active stock Bumi Armada saw some 200 million shares traded. The stock closed up one sen or 5.71% at 18.5 sen.

Globally, Reuters reported Asian shares rose on Thursday, on hopes the Covid-19 pandemic is nearing a peak and that governments would roll out more stimulus measures to support their economies, while expectations of a deal to cut oil production bolstered crude prices.

It was reported that the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia — a group known as OPEC+ — are set to convene a video conference meeting on Thursday.

"Brent crude futures rose by almost 2.6% or 87 cents to US$33.71 a barrel as of 0701 GMT. The contract rose to an intraday high of US$33.90, climbing for a second day. U.S. West Texas Intermediate (WTI) crude futures were up 5% or US$1.27 cents at US$26.36 a barrel, after earlier climbing by as much as 6.1%,” Reuters said.

In Malaysia today, RHB Investment Bank Bhd technical analyst Chiong Tong Chai wrote in a note that WTI crude ended the latest session on a strong footing, adding US$1.46 to close at US$25.09.
"All in, we believe the commodity’s counter-trend rebound that started from an area near US$19.00 has likely reached its top of US$29.13 on 3 April — implying the risk of downtrend resumption is high. Maintain negative trading bias,” Chiong said.



Source: The Edge

Market Daily Report: Stocks down as global Covid-19 death toll mounts

KUALA LUMPUR (April 8): The FBM KLCI closed down 8.53 points or 0.62% at 1,361.39 today with global shares, as news on the higher global death toll at about 80,000 from the Covid-19 pandemic hit sentiment as investors weighed the economic impact from the outbreak.

Across Bursa Malaysia at 5pm, 5.36 billion shares worth RM2.67 billion were traded. There were 617 decliners versus 316 gainers across the exchange.

"Despite several stimulus packages [from our (Malaysian) government] to cushion the impact of Covid-19, traders are advised to deploy the sell into rally strategy for the near term as we believe the KLCI is facing a stiff resistance along 1,370-1,400,” Hong Leong Investment Bank Bhd wrote in a note today.

Globally, it was reported that world stocks turned negative on Wednesday as the coronavirus death toll mounted and eurozone finance ministers failed to agree on a rescue package to help economies recover from the impact of the outbreak.

It was reported that Covid-19 hospitalisation seemed to be levelling off in New York State, but deaths across the US jumped by a record of more than 1,800.

"Meanwhile, France has officially registered more than 10,000 deaths from coronavirus infections, making it the fourth country to cross that threshold after Italy, Spain and the US. Mainland China's new coronavirus cases doubled in 24 hours as infected travellers returned home. After two sessions of gains, European equities fell amid renewed concern about the spread of the virus and the continent's response to it,” Reuters reported.

Across Bursa today, top decliners included KLCI stocks PPB Group Bhd, Sime Darby Plantation Bhd and Tenaga Nasional Bhd.

Most active was Ekovest Bhd after some 233 million shares were traded. Ekovest’s share price closed up 1.5 sen or 3.37% at 46 sen.



Source: The Edge

Market Daily Report: KLCI finishes up at intraday high as Bursa volume exceeds 6b shares

KUALA LUMPUR (April 7): The FBM KLCI closed up 28.23 points or 2.1% today at its intraday high at1,369.92 after Asian equity indices ended higher on hopes the Covid-19 outbreak is slowing and as investors anticipated a truce in the Saudi Arabia-Russia crude oil price war. The price war has increased supply of the commodity and sent prices lower.

In Malaysia, investors also took cue today from the government’s announcement yesterday of an additional RM10 billion assistance package targeted at helping small and medium enterprises affected by the country’s movement control order to curb the Covid-19 pandemic. On March 27, the government announced the RM250 billion Prihatin Rakyat Economic Stimulus Package to mitigate the economic impact of the Covid-19 outbreak on the country.

At 5pm today across Bursa Malaysia, 6.61 billion shares were traded for RM3.37 billion. Bursa registered its all-time high trading volume on Aug 20, 2014, when the exchange saw 7.67 billion shares transacted.

Today, CGS-CIMB Securities Sdn Bhd analysts wrote: "We keep our end-2020 KLCI target of 1,449 points (based on forward P/E of 14.6x) for now, pending a review of our earnings estimates across the board to reflect the impact of Covid-19 and the stimulus packages.”

Across Bursa today, there were 900 gainers versus 134 decliners, after broad-based buying across the exchange. Top gainers included KLCI stocks Petronas Dagangan Bhd and PPB Group Bhd, as investors weighed the impact of the Covid-19 outbreak on world markets.

Bursa top gainer Petronas Dagangan closed up 86 sen or 4.28% at RM20.96.

Globally, it was reported Asian stock markets rallied for a second day on Tuesday and riskier currencies rose, on tentative signs the coronavirus crisis may be levelling off in New York and receding in Europe.

In commodity markets, it was reported crude oil prices rose on Tuesday, amid hope the world's biggest producers of crude will agree to cut output, as the coronavirus pandemic crushes demand, even as analysts warn a global recession may be deeper than expected and big production cuts will be needed.

"Brent crude was up by 80 cents or 2.4% at US$33.85 a barrel by 0657 GMT, after falling more than 3% on Monday. West Texas Intermediate crude was up by 83 cents or 3.2% at US$26.91 a barrel, having dropped nearly 8% in the previous session. The world's main oil producers including Saudi Arabia and Russia, are likely to agree to cut output at a meeting on Thursday, although that would depend on the United States joining in, sources told Reuters.

"But the threat of a major recession hangs over the market due to the halt of much economic activity as a result of the coronavirus pandemic, with half the global population under some form of lockdown or social distancing measures,” Reuters reported.



Source: The Edge

Market Daily Report: Bursa volume nears 6 bil units as O&G shares steal limelight

KUALA LUMPUR (April 6): The FBM KLCI closed up 11.04 points or 0.83% at 1,341.69 today while trading volume across Bursa Malaysia neared six billion shares after Asian equities ended higher as investors weighed the possibility that the increase in new Covid-19 cases has slowed. The Saudi Arabia-Russia crude oil price war is also closely watched.

At 5pm, trade volume across Bursa ended at 5.99 billion shares worth RM2.61 billion as oil and gas-related share prices rose among top-active stocks.

"Investors are now trying to find pockets of positive developments and are seeking trading opportunities," Rakuten Trade Sdn Bhd research vice-president Vincent Lau told theedgemarkets.com.

“As such, any positive developments will make a difference to investor sentiment,” Lau said.
TA Securities Holdings Bhd wrote in a note today that conflicting signals flashed on momentum and trend indicators of the KLCI following last week's choppy trading sessions imply stocks will need to rebuild support at current levels and convince investors of a more sustainable recovery ahead.

"On the other hand, given uncertainty over the severity of the economic damage from the coronavirus pandemic, which already saw massive job losses and spikes in infection rates in the US and Europe, more downside volatility should be expected,” TA said.

Across Bursa today, the index for small market capitalisation stocks closed up 3.72% while the energy index, which tracks oil and gas-related shares, rose 4.39%.

Oil and gas-related shares, including Hibiscus Petroleum Bhd and Sapura Energy Bhd, ended among Bursa’s top-active stocks, as investors evaluated the possibility of a truce in the Saudi Arabia-Russia price war, which has increased the global supply of the commodity and sent prices lower. Bursa top-active stock Hibiscus rose six sen or 13.33% to 51 sen, with some 441 million shares traded.

Reuters reported that oil prices skidded on Monday after Saudi-Russian negotiations to cut output were delayed, keeping oversupply concerns alive, while stocks jumped as investors were encouraged by a slowdown in coronavirus-related deaths and new cases. In currency markets, it was reported that the sterling fell 0.4% early in Asia after British Prime Minister Boris Johnson was admitted to hospital following persistent coronavirus symptoms 10 days after testing positive for the virus.

It was reported that Brent crude fell as much as US$4 after Saudi Arabia and Russia postponed their meeting, initially scheduled for Monday, to Thursday even as the virus pandemic pummels demand. It was reported that equity investors, however, took solace as the death toll from the coronavirus slowed across major European nations, including France and Italy.

It was reported that US stock futures rose 3.2% during Asian trading after US President Donald Trump expressed hope the country was seeing a "levelling off" of the coronavirus crisis. Futures for London's FTSE were up 1.7% while those for Eurostoxx 50 gained 2.6%.



Source: The Edge

Market Daily Report: No respite for stocks as global Covid-19 cases top 1 million

KUALA LUMPUR (April 3): The FBM KLCI closed down 0.25 point or 0.02% at 1,330.65 today, as the Covid-19 pandemic, which has killed more than 50,000 people globally and infected over a million individuals, raised concerns on world economic growth.

Crude oil markets are also closely watched as the pandemic led to demand destruction and as markets take cue from a potential truce in the Saudi Arabia-Russia price war.

At 5pm, the KLCI closed at 1,330.65, after falling to its intraday low at 1,324.41.

Across Bursa, 5.35 billion shares worth RM2.48 billion were traded.

Top decliners included KLCI stocks Petronas Dagangan Bhd and Hong Leong Financial Group Bhd, as investors weighed Bank Negara Malaysia's (BNM) latest forecast for the Malaysian economy.
BNM said today in its Economic and Monetary Review 2019, that Malaysia's economic growth, as measured by Gross Domestic Product (GDP), is projected at between -2% to 0.5% in 2020 against a highly-challenging global economic outlook, due mainly to the Covid-19 pandemic.

Apart from the pandemic, the domestic economy will also be affected by the sharp decline and volatile shifts in crude oil prices and continued supply disruption in the commodities sector, according to the Central Bank. BNM said the global economy is projected to register negative growth in 2020, due mainly to the significant economic repercussions arising from the unprecedented Covid-19 pandemic.

BNM’s latest economic forecast for Malaysia has attracted quick response from economists. RHB Investment Bank Bhd economist Ahmad Nazmi Idrus wrote in a note today that RHB maintains its Malaysia GDP growth projection at 0%, although the research firm noted further revisions are possible, depending on how it perceives the likelihood of a recovery ahead.

"This will depend on how the Government’s policies pan out in the months to come. Meanwhile, given the sharply moderating growth environment and weaker inflation projection, we reiterate our call for monetary policy to be reduced by another 50bps, bringing the interest rates down to 2%. This was similar to the level seen during the Global Financial Crisis of 2007-2009,” Ahmad Nazmi said.
AmInvestment Bank Bhd said the Covid-19 pandemic has a bigger impact on crude oil markets, compared to the Saudi Arabia-Russia price war.

"We view the ongoing Saudi-Russia oil price war, which catalysed the plunge in crude oil prices following the failure of the meeting between Opec and its allies on additional production cuts, has a lower impact, compared with the massive Covid-19-inflicted demand loss.

"In an unprecedented regime which has never occurred in wars, famine or oversupply conditions, the world has essentially begun to shut down in transportation, in which vehicles account for 40% of global crude oil demand and airlines 10%, while petrochemical 30%,” AmInvestment analyst Alex Goh wrote in a note today.


Source: The Edge

Market Daily Report: Bursa energy index jumps 14% after Trump raises hopes of Saudi Arabia-Russia oil war truce

KUALA LUMPUR (April 2): The FBM KLCI closed up 8.24 points or 0.62% at 1,330.90 today as Bursa Malaysia’s energy index jumped 14% in an apparent reaction to crude oil futures’ 10% rise on anticipation of a deal between Saudi Arabia and Russia to end their price war.

Reuters reported that crude oil futures jumped some 10% on Thursday after US President Donald Trump said he expected Saudi Arabia and Russia to reach a deal soon to end their oil price war and Russian President Vladimir Putin called for a solution to "challenging" oil markets. It was reported that Brent crude futures rose 11.36%, or US$2.81, to US$27.55 as of 0701 GMT, while US West Texas Intermediate crude futures increased 10.0%, or US$2.03, at US$22.34.

Across Bursa at 5pm, 5.15 billion shares were traded for RM2.44 billion. There were 671 gainers and 203 decliners.

Bursa’s energy index, which tracks oil and gas companies’ share prices, closed up 87.13 points or 14.23% at 699.56, as these stocks ended among Bursa’s most active and top gainers list.

Top active counters included oil and gas-related Sapura Energy Bhd, Hibiscus Petroleum Bhd and Bumi Armada Bhd.

Leading gainers included KLCI components Petronas Dagangan Bhd and Petronas Gas Bhd.
Petronas Dagangan Bhd closed up RM1.32 or 6.48% at RM21.70 while Petronas Gas rose 34 sen or 2.27% to RM15.30.

"Oil is the talk of the town," AxiCorp Financial Services Pty Ltd global chief market strategist Stephen Innes wrote in a note today.

It was reported that Trump said he had talked recently with the leaders of both Russia and Saudi Arabia and believed the two countries would make a deal to end their price war within a "few days” — lowering production and bringing prices back up.

It was reported that Trump also said he had invited US oil executives to the White House to discuss ways to help the industry "ravaged" by slumping energy demand during the coronavirus outbreak and the price war between Saudi Arabia and Russia.



Source: The Edge

Market Daily Report: Shares sink on profit-taking as global Covid-19 death toll tops 40,000

KUALA LUMPUR (April 1): The FBM KLCI closed down 28.23 points or 2.09% at 1,322.66 today, as the Covid-19 pandemic, which has killed more than 40,000 globally, gave no respite to world share markets. The spectre of a global economic slowdown and lower crude oil prices due to the outbreak, gave reasons to equity investors to take profit today, following yesterday’s gain.

Across Bursa Malaysia at 5pm today, 4.74 billion shares were traded for RM2.77 billion. There were 523 decliners and 355 gainers across the exchange.

"Profit-taking should arise to check yesterday's window-dressing gains, with downside cushioned on hopes extended social distancing and lockdowns in the US and Europe may slow the coronavirus infection rate, and relieve over China's surprise manufacturing expansion in March,” TA Securities Holdings Bhd wrote in a note earlier today.

Globally, Reuters reported Asian shares and Wall Street futures fell on Wednesday, in the first trading session of the quarter, as the coronavirus pandemic and the prospect of a global recession tore through investor confidence.

It was reported that E-Mini futures for the S&P 500 slumped 2.27%, as dire predictions of more virus casualties in the United States weighed on sentiment. It was reported that MSCI's broadest index of Asia-Pacific shares outside Japan erased gains to trade 0.33% lower.

Global crude oil prices slid further on Wednesday, following their biggest-ever quarterly and monthly losses, as a bigger-than-expected rise in U.S. inventories and a widening rift within OPEC, heightened oversupply fears.

It was reported that oil prices are near their lowest since 2002, amid the global coronavirus crisis that has brought a worldwide economic slowdown and slashed oil demand.

"Crude futures ended the quarter down nearly 70%, after record losses in March. As of 0643 GMT, Brent crude was down by US$1.02 or 3.9% at US$25.33 a barrel. U.S. West Texas Intermediate crude was down 35 cents or 1.7% at US$20.13 a barrel, after giving up an earlier gain which analysts said was driven by position building at the start of a the new quarter.

U.S. crude inventories rose by 10.5 million barrels last week, far exceeding forecasts for a 4 million barrel build-up, data from industry group the American Petroleum Institute showed,” Reuters reported.

Across Bursa today, top active counters included oil and gas-related Sapura Energy Bhd, Bumi Armada Bhd and Hibiscus Petroleum Bhd.

Top active stock Sapura Energy closed with a volume of some 201 million shares. The stock fell 0.5 sen or 6.25% to 7.5 sen, as investors weighed the company’s outlook against the current oil and gas sector environment.

"Operating cashflows may be insufficient to repay debt principal from FY22F onwards, requiring bank refinancing, rescheduling or additional loans, Substantial cut to our SOP (sum-of-the-parts)-based target price from 29 sen to 5 sen,” CGS-CIMB Securities Sdn Bhd analyst Raymond Yap wrote in a note today.

"Our target price has been cut by 24 sen, as we have aggressively cut the value of Sapura Energy’s businesses. Downgrade from Hold to Reduce. Sapura Energy has not recovered from the 2014-16 oil price crash, can it survive the second oil price crash?” Yap said.

At the time of writing this theedgemarkets.com report, Sapura Energy had not responded to emailed queries by theedgemarkets.com on the oil and gas support services provider’s outlook.



Source: The Edge