KUALA LUMPUR (April 7): The FBM KLCI closed up 28.23 points or 2.1% today at its intraday high at1,369.92 after Asian equity indices ended higher on hopes the Covid-19 outbreak is slowing and as investors anticipated a truce in the Saudi Arabia-Russia crude oil price war. The price war has increased supply of the commodity and sent prices lower.
In Malaysia, investors also took cue today from the government’s announcement yesterday of an additional RM10 billion assistance package targeted at helping small and medium enterprises affected by the country’s movement control order to curb the Covid-19 pandemic. On March 27, the government announced the RM250 billion Prihatin Rakyat Economic Stimulus Package to mitigate the economic impact of the Covid-19 outbreak on the country.
At 5pm today across Bursa Malaysia, 6.61 billion shares were traded for RM3.37 billion. Bursa registered its all-time high trading volume on Aug 20, 2014, when the exchange saw 7.67 billion shares transacted.
Today, CGS-CIMB Securities Sdn Bhd analysts wrote: "We keep our end-2020 KLCI target of 1,449 points (based on forward P/E of 14.6x) for now, pending a review of our earnings estimates across the board to reflect the impact of Covid-19 and the stimulus packages.”
Across Bursa today, there were 900 gainers versus 134 decliners, after broad-based buying across the exchange. Top gainers included KLCI stocks Petronas Dagangan Bhd and PPB Group Bhd, as investors weighed the impact of the Covid-19 outbreak on world markets.
Bursa top gainer Petronas Dagangan closed up 86 sen or 4.28% at RM20.96.
Globally, it was reported Asian stock markets rallied for a second day on Tuesday and riskier currencies rose, on tentative signs the coronavirus crisis may be levelling off in New York and receding in Europe.
In commodity markets, it was reported crude oil prices rose on Tuesday, amid hope the world's biggest producers of crude will agree to cut output, as the coronavirus pandemic crushes demand, even as analysts warn a global recession may be deeper than expected and big production cuts will be needed.
"Brent crude was up by 80 cents or 2.4% at US$33.85 a barrel by 0657 GMT, after falling more than 3% on Monday. West Texas Intermediate crude was up by 83 cents or 3.2% at US$26.91 a barrel, having dropped nearly 8% in the previous session. The world's main oil producers including Saudi Arabia and Russia, are likely to agree to cut output at a meeting on Thursday, although that would depend on the United States joining in, sources told Reuters.
"But the threat of a major recession hangs over the market due to the halt of much economic activity as a result of the coronavirus pandemic, with half the global population under some form of lockdown or social distancing measures,” Reuters reported.
(story updated)