KLCI pares loss, sentiment stays negative on expectation of targeted MCO restrictions

TheEdge Mon, Jan 11, 2021 12:59pm - 3 months ago

KUALA LUMPUR (Jan 11): The main index at Bursa Malaysia pared some of its losses at midday break, but broader market sentiment stayed negative in the line with the breather at regional markets.

Expectations of further targeted MCO restrictions in Malaysia also kept local investors on tenterhooks.

At 12.30pm, the FBM KLCI was down 20.01 points to 1,613.18. The index had earlier fallen to a low of 1,607.53.

Losers led gainers by 391 to 354, while 784 counters traded unchanged. Trading volume was 4.22 billion shares valued at RM3.26 billion.

The losers included Nestle (M) Bhd, Fraser & Neave Holdings Bhd, CN Asia Corp Bhd, Aeon Credit Service (M) Bhd, Hartalega Holdings Bhd, Time Dotcom Bhd, Petronas Chemicals Group Bhd, Oriental Interest Bhd and Hong Leong Industries Bhd.

The actively traded stocks included Bintai Kinden Corp Bhd, AT Systematization Bhd, DGB Asia Bhd, Vsolar Group Bhd, Vortex Consolidated Bhd, HLT Global Bhd, Key Alliance Group Bhd and Iris Corp Bhd.

The gainers included Kuala Lumpur Kepong Bhd, Heineken Malaysia Bhd, Malaysian Pacific Industries Bhd, KPower Bhd, Euro Holdings Bhd, KESM Industries Bhd and Carlsberg Brewery Malaysia Bhd.

Reuters said Asian shares took a breather on Monday while Treasury yields were at 10-month highs as "trillions" in new US fiscal stimulus plans were set to be unveiled this week, stoking a global reflation trade.

Investors were keeping a wary eye on US politics as pressure grew to impeach President Donald Trump, though signs were an actual trial could be some time away, it said.

Hong Leong IB Research said the strong 1,600-1,618 overhead resistances breakout last Friday (mainly driven by glove stocks) should bode well for further KLCI advance to retest 1,638-1,650-1,667 hurdles, supported by bottoming technical indicators.

It said while the overall 2021 recovery thesis remains intact, opposing news flow between vaccine rollouts and a still rising Covid-19 count coupled with expectations of further targeted MCO restrictions (to be announced by the Prime Minister today) will bring about much volatility along this path, perhaps also exacerbated by fluid politics and regulated short-selling reintroduction.

“Our top picks have a recovery bias (Tenaga Nasional Bhd, RHB Bank Bhd, DRB-Hicom Bhd, MBM Resources Bhd and Focus Point Holdings Bhd), combined with volatility (Bursa Malaysia Bhd), defensives (Telekom Malaysia Bhd, MQREIT), value (IJM Corp Bhd, Sunway Bhd, Bumi Armada Bhd) and sold down pandemic beneficiaries (Top Glove Corp Bhd ),” it said.

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