KUALA LUMPUR: Shares in chipboard makers went against the tide of losses on Bursa Malaysia yesterday, to continue their recent climb, fuelled by a stronger US dollar.

Analysts see the upward trend continuing as they predict the ringgit, which has weakened past the 1998 Asian crisis currency peg of 3.80 per US dollar, is likely to depreciate further due to macroeconomic factors.

The FBM KLCI fell for a second straight day to close 0.28% or 4.75 points lower at 1,712.3 yesterday. Bursa saw 1.69 billion shares, valued at RM1.729 billion, traded.

Shares in Mieco Chipboard Bhd (fundamental: 0.65; valuation: 0.9) rose 10% to a five-year intraday high of 88 sen yesterday, with 11.74 million shares traded. The stock closed 5.63% higher at 85 sen, giving it a market capitalisation of RM177.45 million. An analyst attributed the rise in Mieco's share price to the stronger greenback as it exports most of its products, as well as takeover rumours.

"I am not sure if it will take place or not, but that is the speculation in the marketplace. It is supposedly a local M&A," the analyst told The Edge Financial Daily yesterday.

Evergreen Fibreboard Bhd (fundamental: 0.85; valuation: 0.9) also saw its share price surge as much as 8.4% to an intraday high of RM1.68, to settle 5.16% higher at RM1.63 yesterday, with 9.93 million shares done. Its market cap stood at RM836.15 million.

An analyst said the main factor contributing to the share price rally was the stronger US dollar, as Malaysian furniture makers are net beneficiaries.

"I do not think the current rally will be shortlived, given the ringgit’s weakness," the analyst said.

Shares in HeveaBoard Bhd (fundamental: 2.1; valuation: 1.4), meanwhile, rose 2.5% to an intraday high of RM3.65 yesterday, before settling 0.28% lower at RM3.55, with 480,200 shares done. Its market cap was RM359.94 million.

Year-to-date, Evergreen has risen 156.69%, followed by Mieco's 123.68% and HeveaBoard's 112.57%. In contrast, the FBM KLCI saw a 2.78% decline.

Since mid-June, furniture stocks have moved in the opposite direction of the broad market, rising between 10.25% and 42.98%.

This article first appeared in The Edge Financial Daily, on July 8, 2015.