December 2014 a month to forget, says BIMB Securities

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KUALA LUMPUR (Jan 7): The FBM KLCI was the worst Asian performer with a 3.28% decline in December 2014 pushing year-to-date (YTD) loss to 5.66% attributed to the unrelenting foreign selling, according to BIMB Securities Research.

In a strategy note Wednesday, the research house said that interestingly, China staged a late comeback with an astounding 20.6% gain for December making it the best performer in Asia by far with a 52.9% jump.

“As for the rest of SEA markets, all recorded gains for 2014 with both the Philippines and Indonesia as the 2 best regional performers in 2014,” it said.

BIMB Securities said December was a month as well as a year to forget for the local bourse as the weakening ringgit and crude prices have had instigated a mini sell-down of sort.

It said that for the month December, the FBM KLCI dipped by 3.3% as any signs of buying were swiftly countered by foreign selling which recorded the second highest net outflow at RM2.93 billion for 2014.

Imputing this, BIMB Securities said net foreign outflow for the year escalated to a massive RM6.9 billion as compared to a net inflow of RM3.1 billion in 2013.

“Hammered by persistent foreign selling amid weakened sentiments, the FBM KLCI ended the year on a depressed note at 1,761.25 or 5.66% down year on year.

“The lack of support in terms of earnings growth was also a major setback as we estimate earnings from corporate Malaysia to record -0.6% for 2014.

“The rinnggit was not spared either vis-a-vis the greenback losing 6.7% in 2014 with a depreciation of almost 3.4% in December alone,” it said.