Weak sentiment-driven selloffs continue as uncertainty over Govt formation persists

Weak sentiment-driven selloffs continue as uncertainty over Govt formation persists
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KUALA LUMPUR (Nov 22): As Malaysia’s future policy direction is still up in the air, Bursa Malaysia continued to see selloffs on Tuesday (Nov 22) morning, pending the formation of the next Government.

On Monday (Nov 21), stocks on Bursa Malaysia saw a cumulative RM7.32 billion of market capitalisation evaporate as a result of a knee-jerk reaction to the inconclusive outcome of the 15th general election (GE15).

Sectors which bore the brunt of the selloffs on Monday were consumer products, banking, gaming and breweries.

During morning trade on Tuesday, gaming stocks continued to feel the pressure as the share prices of number forecast operator (NFO) Sports Toto Bhd and casino operator Genting Malaysia Bhd (GenM) continued to decline.

At the time of writing, Sports Toto fell two sen or 1.22% to RM1.62, while Magnum Bhd was down one sen or 0.74% to RM1.35. GenM was down one sen or 0.39% to RM2.55, while its parent company Genting Bhd dropped five sen or 1.17% to RM4.21.

The consumer products sector also bore the brunt of the negative sentiment, as Nestle (M) Bhd topped Bursa’s top losers, while Dutch Lady Milk Industries Bhd and Fraser & Neave Holdings Bhd (F&N) were also in the red.

Top loser Nestle was down RM1.50 or 1.14% to RM130.30, while Dutch Lady fell 38 sen or 1.22% to RM30.82, and F&N retreated two sen or 0.1% to RM20.98.

However, brewer Carlsberg Brewery Malaysia Bhd gained eight sen or 0.36% to RM22.08, while Heineken Malaysia Bhd was down two sen or 0.09% to RM23.18.

Among banking counters, Hong Leong Financial Group Bhd was down eight sen or 0.43% to RM18.52, while Malayan Banking Bhd (Maybank) was up one sen or 0.12% to RM8.55, and RHB Bank Bhd was up two sen or 0.37% to RM5.48.

The resumption of selloffs in the morning session thus far has pushed the market bellwether — FBM KLCI — down 9.12 points or 0.63% at 1,438.84.

Leaders of political coalitions are expected to submit the composition of the new Government as well as the name of the 10th prime minister of Malaysia to the Yang di-Pertuan Agong by 2pm on Tuesday.

GE15 concluded with a hung Parliament — no coalition securing a simple majority of 112 parliamentary seats to form a Federal Government.

As expected, Pakatan Harapan (PH) emerged as the biggest bloc with 82 seats, followed by Perikatan (PN) at 73, Barisan Nasional (BN) at 30, and Gabungan Parti Sarawak (GPS) at 22.

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RM7.32 bil market cap wiped off on weak sentiment, KLCI to test 1,400 level pending PM selection

Surin Murugiah