Malaysian shares seen tracking US losses; firmer ringgit, Tenaga in spotlight

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KUALA LUMPUR (Apr 28): Malaysian shares may today track overnight US share losses as investors eye the strengthening ringgit's impact on the FBM KLCI. Tenaga, which reported stronger financials may also attract market interest.

Yesterday, the KLCI fell three points or 0.16% to close at 1,859.58. The KLCI's loss came on profit taking after the index rose 16.5 points or 0.89% last Friday.

In the US' overnight trades, the Dow Jones Industrial Average fell 0.23%, S&P 500 dropped 0.41% while Nasdaq Composite ended 0.63% lower.

Meanwhile, a stronger ringgit may direct the spotlight on plantation and export-based companies. Yesterday, the ringgit appreciated to 3.5675 versus the US dollar.

Reuters reported that Malaysian palm oil futures fell to their lowest in nearly two weeks on Monday, heading towards their fourth straight session of losses as a modest pick-up in export demand was offset by strength in the ringgit and lingering concerns over rising yields.

A stronger ringgit does not bode well for exporters as their US dollar-denominated income will be less when converted into the ringgit. Notable Malaysian exporters include rubber glove manufacturers Top Glove Corp Bhd and Supermax Corp Bhd besides semiconductor producers Unisem (M) Bhd and Malaysian Pacific Industries Bhd.

Today, Malaysian share investors may also closely watch Tenaga Nasional Bhd after the state-controlled utility reported that net profit rose to RM2.16 billion in the second quarter ended February 28, 2015 from RM1.73 billion a year earlier.

First-half net profit was higher at RM4.51 billion versus RM3.48 billion. Tenaga plans to pay a dividend of 10 sen a share for the quarter in review.