KUALA LUMPUR, July 30 (Bernama) -- Bursa Malaysia's key index closed at an intraday high today, supported by continued buying interest even as renewed geopolitical tensions and a weaker overnight lead from Wall Street following the US Federal Reserve's (Fed) decision to stand pat on interest rates weighed on broader sentiment. The Fed has decided to hold rates steady for the fifth consecutive meeting, with the Federal Funds Rate unchanged between 3.50 per cent and 3.75 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.84 points to 1,720.40 from yesterday’s close of 1,715.56. The benchmark index, which opened 1.14 points lower at 1,714.42, hit its lowest level of 1,710.69 in early trade before gaining momentum for the rest of the day. However, the broader market was negative with losers outpacing gainers 581 to 411, while 612 counters were unchanged, 1,173 untraded, and 87 suspended. Turnover declined to 2.49 billion units valued at RM2.25 billion from ...
Chinese tech stocks have surged over the past few weeks following the announcement of a stimulus spree by the Chinese government, with the Hang Seng Tech Index rising more than 45% in less than four weeks. Notably, this rally appears to be fueled by fresh buying rather than short covering, according to S3 Partners and JPMorgan Chase & Co..
Major companies such as Alibaba Group Holding Ltd., JD.com Inc., and Baidu Inc. have seen their American Depositary Receipts (ADRs) rally, but short positions on these stocks have remained stable. Short interest for these companies has hovered around 2% to 3% of available shares, according to Ihor Dusaniwsky, managing director of predictive analytics at S3. This lack of aggressive short covering indicates that bearish bets have not been significantly closed despite the strong rally.
Fund managers, such as Han Piow Liew from Maitri Asset Management, noted that the magnitude of the recent bounce usually forces shorts to cover their positions. However, the lack of covering suggests that short sellers remain skeptical about the rally's sustainability, given the challenges Chinese tech firms have faced in recent years, including government crackdowns and increased competition.
Despite the skepticism from short sellers, bullish sentiment is dominant in the options market, with bets for gains on a US exchange-traded fund tracking China’s large-cap stocks nearing their highest levels relative to bearish wagers.
Meituan, Alibaba, and JD.com have been among the top performers during this rally, buoyed by the belief that the government's stimulus measures show a strong commitment to reviving the domestic economy. However, analysts like Sonija Li of MIB Securities Hong Kong Ltd. warn that consumer downtrading trends in sectors like e-commerce, travel, and food delivery could pose risks to the tech sector’s long-term recovery.
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