KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Citigroup Inc. expects that uncertainty surrounding the upcoming US presidential election in November will limit gains for metals, dampening global risk appetite and potentially delaying government stimulus efforts in China. According to Citi analysts, including Tom Mulqueen, a more favorable environment for metals pricing may emerge in late Q4 2024 or early 2025, once the election uncertainty is resolved.
Key Takeaways:
Short-Term Constraints on Metals Prices: Citi forecasts that metals like copper and aluminum will remain subdued in the near term due to election-related uncertainties and concerns over global demand, particularly from China. This outlook comes amid a recent downturn in metals, with copper prices falling 1.7% week-on-week and aluminum returning to its level for the year.
Factors Influencing Future Recovery: The bank maintains its three-month price targets of $9,500 per ton for copper and $2,500 per ton for aluminum, predicting that factors such as Federal Reserve rate cuts, China’s policy easing, and improved global manufacturing sentiment could support a recovery in metals pricing later in the year or early next year.
Election and Policy Risks: The potential re-election of former President Donald Trump poses a risk to the anticipated growth rebound due to concerns over new or increased tariffs. Investors are also closely monitoring the US jobs report, which could provide further insights into economic conditions as the Federal Reserve considers rate cuts.
Overall, Citi advises caution in the metals market until more clarity emerges on political and economic fronts.
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