KLCI erases losses on bargain hunting; ringgit weaker

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KUALA LUMPUR (Sept 25): The FBM KLCI rose 1.84 points or 0.1% as investors bought beaten-down Malaysian shares. The KLCI had also tracked Asian share gains.

At 5pm, the KLCI settled at 1,615.01 points on gains in stocks like PPB  Group Bhd and Petronas Dagangan Bhd. Both shares ended among Bursa Malaysia top gainers.

The KLC erased losses, after falling to an intraday low at 1,603.02. Across Asian share markets, Japan's Nikkei 225 and Hong Kong's Hang Seng rose 1.76% and 0.43% respectively.

Malaysian share-trades resumed today, following yesterday's (Sept 24) Hari Raya Haji holiday. On Wednesday (Sept 23), the KLCI fell 22.2 points or 1.4%, as the ringgit depreciated on weaker-than-expected China factory data.

Today, the ringgit weakened to 4.3863 against the US dollar at 5pm, after depreciating to a new level at 4.4045 yesterday. The ringgit's depreciation came amid US interest rate hike expectation this year and 1Malaysia Development Bhd (1MDB) investigations.

Reuters reported US Federal Reserve Chair Janet Yellen said in her speech yesterday that she expects the U.S. central bank to begin raising interest rates later this year, as long as inflation remains stable and the U.S. economy is strong enough to boost employment.

In Malaysia today, Alliance Investment Bank's remisier Raymond Foo said the KLCI had priced in the weakening ringgit factor. Foo noted the depreciating ringgit against the US dollar did not weigh down the KLCI.

Foo said export-oriented stocks should continue to be in investors' radar, as a weaker ringgit would translate into higher income when exporters convert their US dollar earnings into the Malaysian currency.

"I foresee the key index (KLCI) rebounding next week, before heading downwards. The immediate support level remains at the 1,600 level, while immediate resistance level will be at 1,650 points," he said.

Today, Bursa Malaysia saw 355 advancers versus 381 decliners. A total of 1.66 billion shares, valued at RM1.95 billion, exchanged hands.

British American Tobacco (M) Bhd led gainers, while Allianz Malaysia Bhd was the worst performer. IFCA MSC Bhd was the most actively-traded counter.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)