KLCI up after volatile trade as investors weigh Malaysia GDP

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KUALA LUMPUR (Nov 15): The FBM KLCI closed up 1.2 points or 0.08% after volatile trade as investors weighed Malaysia's economic figures and corporate earnings against the impact of the US-China trade war on global growth.

At the 5pm closing bell, the KLCI closed up at 1,594.75, led by IHH Healthcare Bhd. The KLCI had earlier risen to its intraday high at 1,596.85 and fallen to its intraday low at 1,592.22.

Bank Negara Malaysia's (BNM) announced today that Malaysia's economic growth, as measured by Gross Domestic Product
(GDP), moderated to 4.4% in the third quarter of 2019 (3Q19) from a year earlier, after 2Q19's 4.9% on-year expansion.

BNM was quoted as saying 3Q19's slower GDP expansion was primarily due to lower growth in the nation's key sectors and decline in mining and construction activities. Most domestic demand components and net exports also registered slower growth, BNM said.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew told theedgemarkets.com that 3Q19's slower GDP expansion might have been reflected in local companies' earnings during the July-to-September quarter.

“As we go into the (corporate financial) results season, looking at the 3Q19 GDP being so weak, it is quite possible it may be reflected in the quarterly earnings as well.

“We are seeing more stocks reporting (a) drop in profit than (those) reporting growth. This is also the reason investors are being cautious. They would rather wait and see the actual earnings being reported and make their investment calls after the results are announced,” Pong said.

Across Bursa Malaysia today, volume was 2.69 billion shares valued at RM1.7 billion.

Among the 30 KLCI components today, IHH, AMMB Holdings Bhd and Sime Darby Bhd were the top three percentage gainers. Leading gainer IHH closed up 11 sen or 2.1% at RM5.35.

The US-China trade war has been a key theme for world markets. Reuters reported that Asian stocks jumped on Friday, lifted by White House comments that suggested the possibility of an imminent trade deal between Washington and Beijing, which revived hopes that their tariff war may be nearing an end.

It was however reported that investor sentiment remains fragile after weak data from China reinforced concerns about the global economy and amid increasing caution about false signs of progress in the Sino-US trade talks.