FBM Small Cap falls by 2.15% on poor investor sentiment, weak ringgit

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KUALA LUMPUR (June 29): The FTSE Bursa Malaysia Small Cap Index fell as much as 2.15% to 15,630.07 points at 12.10pm, before regaining some ground to 15,656.13 points at the noon trade.

This compared with a 1.19% fall in the FBM KLCI, which fell to a low of 1,690.19 points at 11.55pm, before rebounding to 1,692.77 points at midday break.

Small capitalisation stocks that were the top losers included Teck Guan Perdana Bhd, Ewein Bhd and Privasia Technology Bhd.

In afternoon trade, cocoa producer Teck Guan's share price fell 12 sen or 13.3% to 78 sen. Ewein, a precision sheet metal fabricated parts maker and property developer, saw its shares fall 10 sen or 12.4% to 71 sen.

As for ICT-firm Privasia, its share price fell 3 sen or 12.1% to 26 sen.

Small cap stocks tend to suffer more than large-cap stocks in the event of a selldown of shares by investors due to their lower liquidity.

This comes on the back of poor investor sentiment over fears of a possible downgrade by Fitch Ratings on Malaysia’s sovereign credit rating, which is due for a revision by tomorrow. Fitch currently ranks Malaysia at A- with a negative outlook — the fourth-lowest investment grade.

The ringgit also hit a 10-year low of 3.7830 per US dollar today, its weakest since July 2005.

According to Reuters, Malaysian companies also bought the US dollar for month-end payments, hurting the local currency further.

In the morning session, there were as many as 745 losers compared with 102 gainers on Bursa Malaysia, while 153 counters remained unchanged.

Volume was 950.39 million shares valued at RM696.50 million.