Since Aug 1, the benchmark index has lost 11.7%, but many stocks, including key blue chips, have fallen much more than that, due to high levels of foreign shareholding or thin trading liquidity.
Despite the bearish sentiment, it is still worthwhile to take a look at some of the hardest hit stocks, as analysts said foreign selling — due to redemption and repatriation — was the primary driver of these stocks’ losses.
Between Aug 1 and yesterday, the top loser among the FBM KLCI component stocks was Malaysia Marine and Heavy Engineering Holdings Bhd, down 31.1%. This was followed by RHB Capital Bhd (down 27.5%), Hong Leong Bank (23.7%), MISC Bhd (21.9%). Petronas Chemicals Bhd (20.8%) and Gamuda Bhd (20%).
Among them, analysts have recommended a “buy” on Gamuda, whose selldown they attribute more to a high level of foreign shareholding rather than a deterioration in its business prospects.
Analysts are optimistic over Gamuda’s domestic projects, such as the MRT and a large construction order book, which are relatively unscathed by external factors. The company could benefit if the government embarks on further pump priming to avert a major slowdown, analysts said.
The MMC Corp Bhd-Gamuda joint venture was among the five parties prequalified by MRT Co to bid for the tunnelling package of the Sg Buloh-Kajang (SBK) line.
The MRT project is worth about RM7 to RM8 billion and the pre-qualified tenderers are expected to receive the formal notice of tender from MRT Co within the next two weeks. The award of the contract could happen by March 2012, according to a report by RHB Research.
RHB Research said Gamuda has set a property sales target of RM1.32 billion in FY12 ending July. In the first two months of FY12 it has already clocked up RM360 million in sales. At present, Gamuda’s unbilled property sales are in excess of RM1 billion.
Gamuda is also selling an 8.6-acre (3.4ha) piece of land in Vietnam for RM94 million.
Among the FBM KLCI component counters which fell the least were telecommunication stocks.
The best performers among all FBM KLCI components were Telekom Malaysia Bhd and Digi.Com Bhd, which fell only 0.66% and 2.29% respectively in the same period.
The other telcos exhibiting defensive qualities were Maxis Bhd and Axiata Group Bhd, which lost 5.88% and 4.01%, respectively.
Analysts remained “overweight” on telco counters with their resilient earnings and high dividend yields.
While resilient stocks during a market downturn make good safe havens, analysts point out that they are also unlikely to offer superior strong returns when the market rebounds.
Written by Clint Loh, theedgemalaysia.com
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