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.
Despite a 30% surge in the Hang Seng China Enterprises Index since late September, global fund managers like Invesco Ltd., JPMorgan Asset Management, and Nomura Holdings Inc. remain cautious about the sustainability of the rally. The rebound, driven by Beijing’s stimulus measures including interest rate cuts and liquidity support, has reinvigorated investor confidence. However, concerns over overvalued stocks and the need for more concrete economic recovery actions persist.
Invesco's Raymond Ma warns that some stocks are now overvalued, and their fundamentals may not justify their high prices. Similarly, JPMorgan Asset Management is wary, calling for additional policy measures to further boost confidence and economic activity, especially as global uncertainties—like the upcoming US elections—loom.
While Nomura warns of a potential stock market "boom to bust" scenario, with risks reminiscent of the 2015 crash, HSBC Global Private Banking remains neutral, emphasizing the need for more significant fiscal easing to sustain long-term growth.
On the other hand, some, like Fidelity International, see further potential, citing still-low valuations despite the recent rally.
Investors are also closely watching how the stimulus blitz will affect China’s bonds and currency, as yields have risen and the yuan strengthened over 1% in the past month.
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