KLCI finishes 1.25% higher as Bursa volume tops 9b at all-time high 

KLCI finishes 1.25% higher as Bursa volume tops 9b at all-time high 
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KUALA LUMPUR (May 13): The FBM KLCI finished 17.2 points or 1.25% higher at 1,397.13, while share trade volume across Bursa Malaysia closed higher at an all-time high of 9.59 billion shares, as the spectre of a resurgence in the Covid-19 outbreak dictated world stock market sentiment.

The spectre of a resurgence in the Covid-19 outbreak led to buying of shares in healthcare-related companies like rubber glove manufacturers and hospital operators. In Malaysia, analysts said announcement today on the nation’s stronger-than-expected first quarter 2020 (1Q2020) gross domestic product (GDP) on-year growth at 0.7% had also boosted sentiment in the equities market.  It was reported that the country’s 1Q2020 GDP growth of 0.7% was better than the 1.5% decline forecast in a Reuters poll.

TA Securities Holdings Bhd technical analyst Steven Soo told theedgemarkets.com today that price gains of rubber glove counters were ‘excessive’. He said TA expects the share price of rubber glove counters to pull back. 

Across Bursa at 5pm, share trade volume rose to a record high of 9.59 billion shares, worth RM5.1 billion. There were 558 decliners versus 395 gainers across the exchange.

Bursa’s previous all-time high trading volume was on Aug 20, 2014, when the exchange saw 7.67 billion shares transacted. 

Commenting on the all-time high share trade volume today, Soo said TA deems the sentiment as “overdone”.

Today’s leading gainers across Bursa included rubber glove manufacturers Hartalega Holdings Bhd, Top Glove Corp Bhd and hospital operator IHH Healthcare Bhd. These KLCI stocks are also constituents of Bursa’s healthcare index.

Most active entities included healthcare related companies HLT Global Bhd and K-One Technology Bhd. 

Top active entity HLT warrants saw some 506 million units traded. The warrant’s price closed up seven sen or 33.33% at 28 sen.

Glove dipping line manufacturer HLT is in the spotlight, amid expectation of higher rubber glove demand due to the spectre of a Covid-19 infection resurgence.

Its share price closed up 11.5 sen or 30.26% at 49.5 sen. The stock saw about 321 million shares transacted.

Among Bursa indices, the healthcare index ended up 7.5%, while the plantation gauge rose 0.5%.

Affin Hwang Investment Bank Bhd analysts Nadia Aquidah and Areecca Tan wrote in a note today that the research house has a cautious stance on the demand outlook for crude palm oil (CPO).

They said prices of CPO are under pressure, amid concerns over weakening demand and rising stocks in producing countries.

"Malaysia’s palm-oil inventory in Apr20 increased further to 2.05m MT, the highest level since Nov19, as production exceeded total consumption. We believe CPO prices are also under pressure, amid concerns over weakening demand and rising stocks in producing countries. We keep our UNDERWEIGHT rating on the plantation sector and our CPO ASP (average selling price) assumptions of RM2,100-2,200/MT for 2020- 21E, given our cautious stance on the demand outlook for palm-oil and weak crude oil prices,” they said.

Globally, Reuters reported that investors, many facing steep losses due to the pandemic-driven shakeout in assets over the past few months, have also had to contend with renewed US-China trade tensions.

It was reported Asian shares tumbled on Tuesday on growing worries about a second wave of coronavirus infections, after the Chinese city where the pandemic originated, reported its first new cases since its lockdown was lifted. The central Chinese city of Wuhan reported five new cases on Monday, casting doubts over efforts to lower coronavirus-related restrictions across the country, as businesses restarted and individuals went back to work.

(report updated)