KLCI finishes up 0.9%; Hartalega hits record high

-A +A

KUALA LUMPUR (July 1): The FBM KLCI closed up 13.46 points or 0.9% at 1,514.43 today, helped by a confluence of factors including share price gains for rubber glove manufacturers and higher crude oil prices.

KLCI-linked glove manufacuturer Hartalega Holdings Bhd's share price rose to a record high.

Meanwhile, better economic indicators for Malaysia also appeared to support broad-based buying across Bursa Malaysia as investors priced in a recovery of the local economy in the second half of 2020 as businesses reopen after the Covid-19 pandemic-driven disruption.

"We believe there is a case for the KLCI’s multiple to stay elevated to reflect the robust domestic liquidity driven by the risk-on sentiment globally triggered by the massive monetary and fiscal stimulus packages put in place by central banks and governments around the globe, optimism about the economy reopening and the news flow of vaccine developments," AmInvestment Bank Bhd Malaysia equity research head Joshua Ng wrote in a note today.

"We believe there is a case for staying fully invested in the glove sector as no one knows for sure if the [Covid-19] pandemic is going to go away or evolve into another wave, or any effective treatment drug and/or vaccine could be found anytime soon. Post the pandemic, there is a case for staying invested in the sector given the higher hygiene standards and practices of the global population," Ng said.

Across Bursa today, 7.33 billion securities were traded for RM3.6 billion.

There were 660 gainers and 313 decliners. Hartalega was the top gainer, followed by KLCI-linked Top Glove Corp Bhd, as a resurgence in global Covid-19 infections led to expectations of higher demand for gloves.

Hartalega's share price closed up RM1.78 or 13.69% at RM14.78 after rising to a record high of RM15 in intraday trade. Top Glove's share price finished RM1.04 or 6.46% higher at RM17.14.

Among the 30 KLCI stocks, Hartalega was the top percentage gainer, followed by Top Glove. Bursa's Healthcare Index, which includes rubber glove manufacturers, ended up 4.11% to become the leading percentage gainer among the bourse's indices.

Equity investors could have also taken their cue from better global economic indicators.

In Malaysia today, IHS Markit said its Malaysia Manufacturing Purchasing Managers’ Index (PMI) rose sharply to 51 in June 2020 from 45.6 in May, indicating an improvement in the health of Malaysia's goods-producing sector and stronger economic growth.

Yesterday, it was reported that China's official manufacturing PMI came in at 50.9 in June, compared with May's 50.6, National Bureau of Statistics data showed, and was above the 50.4 forecast in a Reuters poll of analysts.

Today, Areca Capital Sdn Bhd chief executive officer Danny Wong told theedgemarkets.com that China’s latest manufacturing data was a positive for share trade sentiment across Asia.

“[The China numbers] were quite encouraging [in terms of Covid-19 recovery cases and economic data].

"If China is the first to re-emerge from this virus fully recovered, it would be positive for the region, which will have optimism about the recovery of their local economies,” Wong said.

Reuters reported that global crude oil prices rose today after an industry report showed crude stockpiles in the US staged a bigger drop than expected, suggesting demand was improving even as the Covid-19 outbreak spread around the world.

Brent crude rose 31 cents, or 0.8%, to US$41.58 (RM178.21) a barrel by 0632 GMT after declining more than 1% yesterday. US crude was up 35 cents, or 0.9%, at US$39.62 a barrel, having dropped by 1.1% in the previous session.