KLCI stays below 1,700 on tepid sentiment after poor 4Q18 corporate earnings

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KUALA LUMPUR (March 4): The FBM KLCI remained below the crucial 1,700-point level at the midday break today as sentiment stayed tepid following a disappointing fourth quarter 2018 (4Q18) corporate earnings season.

At 12.30pm, the FBM KLCI was down 6 points to 1,694.76. The index had earlier slipped to a low of 1,688.22.

Gainers led losers by 308 to 284, while 516 counters traded unchanged. Volume was 1.77 billion shares valued at RM1.03 billion.

The top losers included Nestle (M) Bhd, Petronas Dagangan Bhd, Carlsberg Brewery Malaysia Bhd, Malaysia Airports Holdings Bhd, Caring Pharmacy Group Bhd, Rapid Synergy Bhd, Tenaga Nasional Bhd, Batu Kawan Bhd and KESM Industries Bhd.

The actives included Sapura Energy Bhd, Bumi Armada Bhd, Dayang Enterprise Holdings Bhd, Perdana Petroleum Bhd, Iskandar Waterfront City Bhd and Sino Hua-An International Bhd.

The gainers included Time dotCom Bhd, Aeon Credit Service (M) Bhd, Petra Energy Bhd, Apex Healthcare Bhd, ViTrox Corp Bhd, Dayang, Merge Energy Bhd, Westports Holdings Bhd, RHB Bank Bhd and Mulpha International Bhd.

Most Southeast Asian stocks climbed on Monday amid reports the United States and China were close to striking a trade deal, while Malaysia fell despite the country reporting a higher-than-expected trade surplus for January, according to Reuters.

US President Donald Trump and his Chinese counterpart Xi Jingping could reach a formal trade deal at a summit around March 27 given progress in talks between the two countries, the Wall Street Journal reported on Sunday, Reuters said.

Corporate earnings of Malaysian stocks were spectacularly disappointing in 4Q18, as large capitalisation stocks missed expectations, according to Affin Hwang Capital Research.

"Huge misses in the telco, transport and utilities sectors were enough to drag market earnings per share (EPS) into negative territory for 2018," said a strategy note from the research house today.

"Cumulative 4Q18 core earnings fell a sharp 23% year-on-year or 14% quarter-on-quarter, one of the largest ever quarterly earnings contractions in recent years," it added.

Meanwhile, foreign selling of Malaysian equity rose to RM447.7 million last week from RM319 million the prior week, according to MIDF Amanah Investment Bank Bhd Research.

In his weekly fund flow report today, MIDF Research's Adam M Rahim said the disposal last week was the largest in nine weeks.

"For the month of February 2019, international investors dumped RM815.6 million net.

"This brings the year-to-date foreign net inflow into Malaysia to RM53.3 million or US$10.4 million," MIDF Research said.