FBM KLCI falls 0.91%, dragged mainly by banking stocks

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KUALA LUMPUR (April 1): The FBM KLCI closed 14.97 points or 0.91% lower, dragged down mainly by declines in banking stocks after Bank Negara Malaysia said on Friday growth in outstanding loans moderated to 5% in February from January's 5.5% expansion.

At 5pm today, the KLCI closed at 1,628.66. Among KLCI-linked banking stocks, Public Bank Bhd and Hong Leong Bank Bhd ended among Bursa Malaysia top decliners.

Public Bank fell 68 sen to RM22.48 while Hong Leong Bank dropped 32 sen to RM19.98.

Bursa Malaysia's financial services index closed down 231.76 points or 1.37% at 16,737.37. The financial services index dropped the most among the bourse's indices.  

CIMB Research analyst Winson Ng wrote in a note earlier today: "The industry’s loan growth continued to ease from 5.5% y-o-y at end-Jan 19 to 5% y-o-y at end-February 2019. This was the third consecutive month of a slowdown in loan momentum

"Industry’s loan base grew by a lacklustre 0.1% in 2M19. This reaffirms our expectation for a slowdown in loan growth from 5.6% in 2018 to a projected circa 5% in 2019F."

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew told theedgemarkets.com: “Some of the banks were downgraded, and their share prices declined in tandem. The consumer stocks were down too amid thin trading volume.
"On the other hand, total trading volume on the bourse was decent today, which means that the small cap stocks were being actively traded.”

Across Bursa Malaysia, 2.63 billion shares worth RM1.97 billion were traded today. Despite the KLCI's decline, there were 415 gainers against 372 decliners across Bursa Malaysia.

Asian share indices, however rose substantially as investors took cue from positive China economic data, and signs of progress in China-US trade negotiations.

In China, the Shanghai Stock Exchange Composite closed up 2.58% while Hong Kong’s Hang Seng climbed 1.76%. Elsewhere, Japan’s Nikkei 225 increased 1.43% while South Korea’s Kospi rose 1.29%.

Reuters reported that Asian stocks powered higher on Monday as positive Chinese factory gauges and signs of progress in Sino-US trade talks boosted sentiment, although another defeat for British Prime Minister Theresa May's Brexit deal added to sterling's woes.