Market Daily Report: FBM KLCI retreats on glove, banking share selling pressure

 

KUALA LUMPUR (March 30): The FBM KLCI finished down 2.09 points or 0.13% at 1,609.19 today, as investors weighed global news including the US Customs and Border Protection’s (CBP) directive to its personnel at all US ports of entry to begin seizing disposable gloves produced in Malaysia by Top Glove Corp Bhd, besides updates on Archegos Capital's equity derivative default, which hit international banking stocks overnight.

Today, sentiment from the CBP’s directive to its personnel to begin seizing gloves produced by Top Glove over forced labour allegations appeared to have impacted share prices of rival glove manufacturers including  Supermax Corp Bhd and Hartalega Holdings Bhd.

Rakuten Trade Sdn Bhd head of equity sales Vincent Lau told theedgemarkets.com today that the "decline in share prices of rubber glove manufacturers could be due to sentiment from the news on the CBP’s directive involving Top Glove”.

Top Glove, Hartalega and Supermax, which are constituents of the 30-stock KLCI, are also members of Bursa Malaysia’s Health Care Index, which closed down 1.11%.

Meanwhile, Archegos Capital's equity derivative default, which hit international banking stocks overnight, appeared to have influenced sentiment on the broader global stock market today.

It was reported that Nomura and Credit Suisse are facing billions of dollars in losses after sources revealed that Archegos Capital defaulted on margin calls, putting investors on edge about who else might have been caught out.

According to news reports, Nomura shares were down a further 1.1% Tuesday after dropping as much as 16% on Monday, when it revealed it could take a US$2 billion loss from the hedge fund fallout.

"From a market perspective with contagion looking limited ... despite the news flow of further forced liquidations and prime brokerage losses, this looks at this stage to be a positioning-driven sell-off in US futures and various single stock names,” Reuters quoted Eleanor Creagh, market strategist at Saxo Bank, as saying.

Across Bursa today, 5.78 billion shares valued at RM3.59 billion were traded. There were 649 decliners versus 414 gainers.

Top decliners included Top Glove, which closed down 27 sen or 5.35% at RM4.78, while Supermax fell 17 sen or 4.13% to RM3.95.

Notable decliners included Hong Leong Financial Group Bhd after the stock’s price finished down 38 sen or 2.1% at RM17.68.

Meanwhile, most-active stocks included newly-listed Flexidynamic Holdings Bhd after the glove chlorination specialist registered a share trade volume of about 108 million shares on its ACE Market debut.

Flexidynamic, which was listed at 20 sen a share, closed up at 43 sen after the stock was traded between 72 sen and 41.5 sen today.

Globally, investors also took a cue from the impact of a strengthening US dollar on Asian currencies besides the results of FTSE Russell's semi-annual country classification review for fixed income and equities.

It was reported that Asia's emerging currencies buckled under a firmer US dollar today after US bond yields set a new 14-month high, while stock markets in Indonesia and the Philippines fell around 1%.

Meanwhile, it was reported that the yield on 10-year Malaysian bonds fell 4.3 basis points to 3.292% — their lowest in more than two weeks — after FTSE Russell removed the country from its watch list and officially retained it in its flagship government bond index. 

"This is a much welcome relief, and will allow investors to re-focus on other external drivers,” Reuters quoted HSBC as saying.

 

 

Source: The Edge