FBM KLCI put warrants gain amid share index, ringgit weakness

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KUALA LUMPUR (Aug 10): FBM KLCI put warrants were among top gainers and most-active entities across Bursa Malaysia amid a bearish broader market.

Weaker broader market sentiment comes at a time when the ringgit had depreciated to fresh levels and as investors evaluated Malaysia's political uncertainties.

KLCI put warrant FBMKLCI-HH, the third-largest gainer, rose as much as 10.5 sen or 15% to 81 sen with 180,000 units done at 11.11am.

Meanwhile, FBMKLCI-HK which was the most-actively traded counter at 11.12am, gained as much as 1.5 sen or 12% to 14.5 sen with some 35 million units traded.

For comparison, the FBM KLCI fell 25.75 points or 1.5% to 1,656.90 at 11.15am. The ringgit changed hands at 3.9260 against the US dollar, substantially weaker than the strongest level at about 3.14 over the last one year.

KLCI put warrants allow investors to hedge against downward movements in the broader market.

Analysts said the broader market decline could continue until foreign selling of local shares reduces and the ringgit stabilises.

"With so much uncertainty, investors should remain cautious," TA Securities Holdings Bhd said in a note today.

"Locally, investors will be on the lookout for Malaysia's 2Q15 GDP data this Thursday. Consensus expectations are pointing towards a narrower growth of 4.5% year-on-year (y-o-y) versus 5.6% y-o-y in the first quarter, affected by the impact from GST implementation and weaker demand in key exports sectors like E&E and oil and gas," TA Securities said.

BIMB Securities wrote in a note today the local market was expected to remain weak in the near future with concerns over the weakening ringgit, crude oil price and continuous selling by foreign institutions.

According to BIMB, the KLCI's support was seen at the 1,650–1,660 point level.