KUALA LUMPUR (April 3): The FBM KLCI retreated at mid-morning Friday after Bank Negara Malaysia (BNM) depicted a less-than-favourable outlook for Malaysia in 2020 in its 2019 Annual Report.

The pullback this morning came after BNM said the country’s economy could contract by as much as 2% due to the coronavirus outbreak.

Malaysia now has the highest number of reported coronavirus infections in Southeast Asia with more than 3,100 cases and 50 deaths.

At 10.05am, the FBM KLCI shed 2.14 points to 1,328.76. The index had earlier risen to a high of 1,333.82.

Gainers led losers by 286 to 248, while 296 counters traded unchanged. Trading volume was hefty with 2.06 billion shares valued at RM674.85 million.

Among the decliners were Nestle (M) Bhd, Petronas Dagangan Bhd, Carlsberg Brewery Malaysia Bhd, Kuala Lumpur Kepong Bhd, Heineken Malaysia Bhd, QL Resources Bhd, Sime Darby Plantation Bhd and PPB Group Bhd.

The actives included Bumi Armada Bhd, Hibiscus Petroleum Bhd, Sapura Energy Bhd, Velesto Energy Bhd, Alam Maritim Resources Bhd, KNM Group Bhd and Borneo Oil Bhd.

The gainers included Panasonic Manufacturing Malaysia Bhd, Hartalega Holdings Bhd, PMB Technology Bhd, Hong Leong Bank Bhd, Frontken Corp Bhd, Dutch Lady Milk Industries Bhd and Yinson Holdings Bhd.

Meanwhile, Bloomberg reported that the cost of the coronavirus pandemic could be as high as US$4.1 trillion, or almost 5% of global gross domestic product, depending on the disease’s spread through Europe, the US and other major economies, citing Asian Development Bank (ADB).

A shorter containment period could limit the damage to US$2 trillion, or 2.3% of world output, the Manila-based lender said in its Asian Development Outlook report released Friday. Developing Asia, including China, accounts for 22% to 36% of the pandemic’s total cost, said ADB, according to Bloomberg.

Hong Leong IB Research said taking cues from overnight Dow’s 2.2% rebound and hopes of more business-friendly BNM policies and government stimulus measures to spur the ailing domestic economy, KLCI could still advance further to retest 1,353 (March 26 high) and 1,363 (38.2% FR) territory before profit taking pullback near the formidable hurdles at 1,369-1,419 gap (March 16).

“We reiterate 'Sell Into Strength' strategy and rebalance portfolio to sectors that are more defensive as the world has clearly entered a recession (based on IMF) due to the coronavirus pandemic,” it said.