KLCI sheds 19.07 points on continued selldown, losers overwhelm bourse

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KUALA LUMPUR: The FBM KLCI continued to trend downwards today, falling 19.07 points and slipping further beyond its psychological level of 1,800 points.

As at 5pm, the index has declined 1.07% to 1767.77. It closed 9.54 points down yesterday at 1,786.84.

Meanwhile, Bursa Malaysia saw 2.56 billion shares worth RM2.68 billion changing hands today. Decliners hammered gainers in a wider margin, at 1,001 against 64; while 144 counters were unchanged.

When contacted, Dr Nazri Khan, vice president and head of retail research of Affin Hwang Investment Bank Bhd told The Edge Markets.com that he expects more selling in the immediate term, but notes that it should be over within a few weeks, citing September and October as “seasonally” correction months.

“This confirms what we see - an ongoing correction to the 7% gain that the KLCI made this year. It’s natural for the index to take a rest… Don’t forget that since September 2011, the composite index has gained 44%. Ever since, there is not quite a correction,” Nazri points out, noting that this correction is healthy.

“Fundamentally, we have nothing to worry about. I’d suggest to investors to buy on dips, especially stocks which will benefit from Budget 2015 in sectors such as telecommunication, technology, construction, and those which beneficits from the goods and services tax,” he added.

Nazri, however, does not recommend investors to look into the oil and gas sector at this point, citing weak oil prices with no immediate catalyst in sight.

In a strategy note that was just released, CIMB Research said its KLCI target of 1,950 points for end-2014 and 2,050 points for end 2015 remained unchanged.

“This is based on an unchanged 10% premium over the 3-year moving average P/E. We also continue to like the Economic Transformation Programme winners, including the oil & gas, construction and property sectors,” said the research house.

CIMB Research suggests that investors who are taking a longer-term approach may want to start accumulating positions in stocks that have fallen the most.

Reuters earlier reported that Southeast Asian stock markets mostly fell amid heightened concerns about global economic growth after weak US data, released yesterday, showed that US retail sales and producer prices have both dropped last month, “a worrisome economic signal that helped fuel a selloff on Wall Street”.

British American Tobacco (Malaysia) Bhd (BAT) and Hong Leong Financial Group Bhd (HLFG) were among the top gainers.

BAT rose RM1.22 or 1.86% to RM66.72, while HLFG rose 24 sen or 1.43% to RM16.98. The top loser was Fraser & Neave Holdings Bhd (F&N), having shed 76 sen or 4.62% to RM15.68.

Sumatec Resources Bhd and PDZ Holdings Bhd were among the most actively traded stocks on the local bourse.

The MSCI 45-country world index has lost almost 10 percent in the last three weeks. Across the region, Japan’s Nikkei 225 fell 2.22% to 14,738.38, Hong Kong’s Hang Seng Index slipped 1.03% to 22,900.94, and South Korea’s Kospi was down 0.37% to 1,918.83.

Taiwan’s Taiex also fell 0.25% to 8,633.69, while Singapore’s Straits Times Index dropped 1.19% to 3,160.72.