KUALA LUMPUR (Dec 16): The FBM KLCI settled up 12.21 points or 0.73% at 1,686.23 during Bursa Malaysia’s afternoon break today amid broad-based buying across the exchange as Asian shares tracked US equities Tuesday overnight rise.
Malaysia’s share price rise today could have been partly due to news yesterday that Parliament voted 111-108 to approve the country’s 2021 budget. Such sentiment augured well for domestic political certainty, which bodes well for local markets also.
Across Bursa at 12:30pm today, 6.72 billion securities were traded for RM2.74 billion as 26 of the 29 Bursa indices rose while three — the energy, industrial products and services, and plantation gauges — fell.
On the KLCI, CGS-CIMB Securities Sdn Bhd analysts Ivy Ng Lee Fang, Michelle Chia and Nagulan Ravi wrote in a note today that the research firm maintained its KLCI target of 1,628 points for end-2020 but raised its end-2021 KLCI target to 1,759 from 1,732 to reflect changes in KLCI constituents.
"Our preferred sectors are banks, gaming, oil and gas, media, packaging, EMS (electronics manufacturing services), rubber gloves and healthcare; while our top three stock picks are Inari [Amertron Bhd], Public Bank [Bhd] and Telekom Malaysia [Bhd].
"We project KLCI earnings to decline 10% in 2020F before rebounding by 38% in 2021F. Key risks to our call include slower global growth, setbacks to vaccination timelines, rising trade risks and political uncertainties,” they said.
TA Securities Holdings Bhd analysts wrote in a note today that while domestic political certainty has improved following the Budget 2021 approval by Parliament yesterday, stronger buying momentum and economic recovery plays will be crucial to sustain further stock market upside in the near term, given increasing overbought momentum and profit-taking interest restricting immediate upside.
"Blue chips rose on Tuesday, with the banking and technology sectors leading gains on economy recovery optimism, and a late afternoon rally after Parliament approved Budget 2021 with a slim majority,” the analysts said today.
Among Bursa indices, the Energy Index, which tracks share prices of oil and gas related companies, settled down 0.35% following news that crude oil prices dropped on Wednesday on a surprise gain in crude oil inventories in the US and amid demand concerns due to lockdowns in Europe to counter the Covid-19 pandemic.
Brent crude futures fell eight cents, or 0.2%, to US$50.68 a barrel at 0126 GMT, while US West Texas Intermediate crude futures fell six cents, or 0.1%, to US$47.56 a barrel, Reuters reported.
Oil and gas related companies, including Petronas Chemicals Group Bhd and Hengyuan Refining Co Bhd, fell among Bursa top decliners.
Top decliner Petronas Chemicals, which is also a KLCI constituent, saw its share price settled down 44 sen or 5.53% at RM7.52.
Hengyuan dropped 18 sen or 2.74% to RM6.38.
Meanwhile, Bursa's leading gainers included KLCI stocks Top Glove Corp Bhd and Public Bank Bhd.
Top Glove’s share price settled up 34 sen or 5.3% at RM6.75 while Public Bank rose 32 sen or 1.48% to RM22.
Global shares rose. It was reported that Asian stocks rose on Wednesday as hopes of effective coronavirus vaccines and the growing prospect of more US fiscal stimulus cheered investors ahead of the Christmas holiday season.
It was reported that MSCI's broadest index of Asia Pacific shares outside of Japan added 0.6% after two straight days of losses.
"[Overnight in the US,] Wall Street showed signs of a Santa rally on Tuesday, with the Nasdaq closing at a record high, helped by optimism about a potential government stimulus to protect the economy from the coronavirus pandemic,” Reuters reported.
It was reported that the Dow Jones Industrial Average rose 1.13% to end at 30,199.31 points, the S&P 500 gained 1.29% to 3,694.62 while the Nasdaq Composite climbed 1.25% to end at 12,595.06, exceeding its previous record high close on Dec 8.