Friday 29 Mar 2024
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KUALA LUMPUR (March 13): Put warrants linked to Malaysia’s FBM KLCI, Hong Kong’s Hang Seng and the US' S&P 500 dominated Bursa Malaysia top gainers in morning trades today as investors bought the warrants to hedge against broader market losses amid the Covid-19 pandemic and lower crude oil price concerns.

At 10:35am, Bursa top gainer SP500-HL rose RM1.78 to RM2.28, FBMKLCI-HAF climbed 48 sen to 82 sen while HSI-H8T was up 47 sen at RM2.04. In the broader market, the KLCI fell 87.45 points to 1,331.98.

Globally, Reuters reported that Asia’s stock markets crashed on Friday as panic gripping world financial markets deepened, and even haven assets such as gold and bonds were ditched to cover losses in the wipeout. 

It was reported that Wall Street tanked on Thursday, slamming the book on the longest-ever US bull market after new travel restrictions to curb the coronavirus spread spooked investors and rattled world markets.

"President Donald Trump’s Europe travel ban, announced late Wednesday, sent all three major US stock indexes into a tailspin, with the S&P 500 and the Nasdaq confirming their first bear market since the financial crisis.

"The Dow Jones Industrial Average fell 2,352.6 points, or 9.99%, to 21,200.62, the S&P 500 lost 260.74 points, or 9.51%, to 2,480.64 and the Nasdaq Composite dropped 750.25 points, or 9.43%, to 7,201.80,” Reuters reported.

In a note today, DBS Group chief economist Taimur Baig and forex strategist Philip Wee said the group sees three key risks ahead. First, the combination of ongoing market correction and incipient economic slowdown will continue to push up corporate debt spreads and default risks, causing a negative feedback loop between the real and financial sector, according to them.

"Second, insufficient or poorly communicated public policy response to the outbreak will perpetuate consumption and investment uncertainty, as well as compound distress in the corporate sector. Third, the combination of risk aversion and commodity price collapses would push energy exporting economies in particular and emerging markets in general to experience sudden stop in capital flows, paving the ground for rolling economic crises.

"On the bright side, China is turning a corner with respect to the rate of Covid-19 infection and slowly getting back on its feet. Apple is re-opening all its stores in China today, while luxury goods sales are reportedly rebounding. Barring a resurgence in infection as people go back to work, China may well lead the global recovery this year,” they said.

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