Market Close - KLCI drops 1%, slower GDP growth in focus

KUALA LUMPUR (May 16): The FBM KLCI fell some 1% as investors took profit following gains in recent days.

This came amid news that Malaysia's first quarter economic growth slowed to 4.1% from a year earlier, according to analyts.

At 5pm, the KLCI fell 16.31 points to 1,766.72 points. A total of 2.5 billion shares worth RM2.4 billion changed hands. The bellwether had remained in the red throughout the day.

The KLCI was pushed down by HONG LEONG FINANCIAL GROUP BHD [] (HLFG), KUALA LUMPUR KEPONG BHD [] (KLK), HONG LEONG BANK BHD [] and PPB GROUP BHD [].

TA Securities head of research Kaladher Govindan said news of the lacklustre economic growth was a main driver hampering market performance.

However, he said the correction in the KLCI was a much waited event after it surged in the days after the elections. The gains had seen the benchmark breaching the 1,800-level.

“The technical correction is somehow much needed. (Malaysia’s) stock market is currently trading at about 15 times price-earnings ratio for calendar year 2014, which is higher than Singapore’s, Thailand’s and Indonesia’s.

“The correction (in the KLCI) may continue tomorrow," Kaladher told theedgemalaysia.com over telephone.

He said foreign buyers have propped up the KLCI in the past few weeks while local funds have been net sellers.

However, going forward, local funds might have to begin buying to prevent their investments from underperforming.

Across the local exchange today, 591 counters were decliners against 309 gainers.

LUSTER INDUSTRIES BHD [] was the most-active stock followed by PATIMAS COMPUTERS BHD [] and Luster warrants.

Top gainers included DUTCH LADY MILK INDUSTRIES BHD [], CAHYA MATA SARAWAK BHD [] and BRITISH AMERICAN TOBACCO (M) [] Bhd.

Top losers were HLFG, KLK and Eastern & Oriental Bhd.

Across Asia Pacific, Japan’s Nikkei declined 58.79 points or 0.39% while Australia’s ASX 200 dropped 26 points or 0.5%.

Hong Kong’s Hang Seng rose 38.44 points or 0.17%, China’s Shanghai Composite marched higher by 27.18 points or 1.22%, while South Korea’s Kospi gained 15.55 points or 0.79%.

Singapore’s Straits Times rose 11.19 points or 0.33%.

Most stock markets in Asia edged up on Thursday after solid growth data from Japan improved sentiment, although Tokyo's Nikkei lagged, while worries about a prolonged recession in the euro zone kept the common currency under pressure, Reuters reported.


Written by Kamarul Anwar of theedgemalaysia.com