Malaysia Share Market in a Bad Shape

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Bursa Malaysia closed sharply lower today on panic selling after Standard and Poor’s said it may cut Malaysia’s sovereign credit rating if the government did not deliver promised reforms to cut spending to reduce its fiscal deficits.

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) lost 23.02 points to close at 1,617.99. It hovered between 1,613.16 and 1,635.95 throughout the day.The downtrend was dragged by losses in heavyweights Axiata and CIMB which fell 20 sen each to RM6.02 and RM7.54, respectively.

Affin Investment Bank vice-president and head of retail research, Nazri Khan, said Malaysia’s ranking slippage in the latest World Economic Forum’s Competitiveness Index 2012-2013 also gave investors the excuse to close bets and take profits ahead of the potential budget and local election.

He said market-watchers were also eagerly awaiting the outcome of the European Central Bank policy meeting later today to solve the region’s debt crisis.

“We noted that Asian stocks in general have been on cautious mode since early this week where negative economic reports from the US, China and Australia highlighted slowdown in the global growth.

“The FBM KLCI has plunged 35 points since it opened this week at 1,649 after moving sideways within a tight range of 1,645-1,655 for the past three weeks,” he told Bernama today.

Nazri said the heavy decline below 1,630 on heavy volume constituted a major support breakdown and confirmed September as seasonally bearish month and basically changed the short- and medium-term uptrend to downtrend.

“Given that, we expect FBM KLCI to continue further correction to the next support level of 1,600 and 1,580,” he said.

The Finance Index lost 206.68 points to 14,500.27, Industrial Index fell 38.02 points to 2,805.74 and the Plantation Index eased 122.66 points to 8,400.10.

The FBM Emas Index fell 156.81 points to 11,022.06, FBM 70 Index decreased 169.49 points to 12,002.01 and the FBM Ace Index lost 79.72 points to 4,414.35.

Losers beat gainers by 739 to 157, while 241 counters were unchanged, 487 untraded and 25 others suspended.

Total turnover declined to 1.30 billion shares worth RM1.99 billion from 1.35 billion shares worth RM1.7 billion yesterday.

Volume on the Main Market increased to 865.54 million units valued at RM1.92 billion from 812.47 million units valued at RM1.62 billion yesterday.

Turnover on the ACE Market decreased to 362.50 million shares worth RM61.98 million from 467.26 million shares worth RM74.12 million previously.

Warrants declined to 63.55 million units valued at RM5.17 million from 67.84 million units valued at RM4.84 million yesterday.

Of the actives, Nextnation Communication was flat at 13.5 sen, Ingenuity Solutions added two sen to 25 sen and Global Tec Formation was unchanged at 7.5 sen.

For heavyweights, Maybank declined 14 sen to RM9.00, Sime Darby lost three sen to RM9.76 and Maxis dipped 15 sen to RM6.80.

Consumer products accounted for 80.81 million shares traded on the Main Market, industrial products 159.26 million, construction 33.96 million, trade and services 352.38 million, technology 33.89 million, infrastructure 18.34 million, finance 84.66 million, hotels 3.47 million, properties 65.69 million, plantations 25.60 million, mining nil, REITs 7.28 million and closed/fund 213,900. – KL-Today