KUALA LUMPUR (Sept 25): The main index at Bursa Malaysia pared some of its gains at the midday break Friday as Malaysia was retained on the Watch List of the FTSE World Government Bond Index (WGBI) for a potential downgrade.

At 12.30pm, the FBM KLCI was up 8.10 points at 1,508.90. The index had earlier risen to a high of 1,516.00.

Losers edged gainers by 299 to 297, while 697 counters traded unchanged. Trading volume was 3.20 billion shares valued at RM2.34 billion.

The top gainers included Hartalega Holdings Bhd, Kossan Rubber Industries Bhd, Fraser & Neave Holdings Bhd, Dutch Lady Milk Industries Bhd, Bursa Malaysia Bhd, Time dotCom Bhd, Greatech Technology Bhd, UWC Bhd and Press Metal Aluminium Holdings Bhd.

The actively traded stocks included Advance Synergy Bhd, Kanger International Bhd, Sapura Energy Bhd, HLT Global Bhd, Lambo Group Bhd, Careplus Group Bhd and Pasukhas Group Bhd.

The decliners included Kuala Lumpur Kepong Bhd, Komarkcorp Bhd, Nestle (M) Bhd, Westports Holdings Bhd, Cahya Mata Sarawak Bhd, Adventa Bhd, MISC Bhd and Careplus.

Reuters said Asian shares rose on Friday after robust US housing data supported a late tech-driven rally on Wall Street, with investors picking up the pieces a day after a broad regional index posted its biggest daily loss in more than three months.

US stocks ended positive in choppy trade on Thursday, led by a dogged comeback in the technology sector, having initially sold off on higher-than-expected unemployment claims, it said.

Kenanga Research said the news that FTSE Russell kept Malaysia on a watchlist was not entirely surprising and has a positive read through for the equity market since it removes the immediate risk of fund outflow (and hence negatively impact overall liquidity) from passive index-positioned funds.

Kenanga’s Koh Huat Soon said had Malaysia been downgraded from market accessibility level 2 to 1, it would have been removed from the WGBI with an estimated significant potential outflow of US$8 billion, negatively impacting liquidity and raise yields with negative impact on an already fragile economy.

“That said, although Malaysia remains on the watch list and the risk of a decision in March 2021 for the possible removal remains, this news comes as a relief for the capital markets and the economy,” said Koh.