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Malaysian Stock Market Dips on May 27 Amid Cautious Sentiment
KUALA LUMPUR - The Malaysian stock market ended on a negative note on May 27, with the FTSE Bursa Malaysia KLCI (FBM KLCI) slipping 0.53 percent, or 8.14 points, to 1,526.16. This decline was due to profit-taking in financial services counters and continued foreign fund outflows, as global trade tensions persisted.
At the close of trading, the benchmark index stood at 1,526.16, compared to Monday's close of 1,534.30. The FBM KLCI had opened 0.94 of-a-point higher at 1,535.24, and fluctuated between 1,521.93 and 1,535.41 throughout the day.
In the broader market, decliners outpaced gainers, with 575 counters recording losses compared to 338 that registered gains. There were 474 counters unchanged, 1,008 untraded, and 17 suspended. The total turnover declined to 2.65 billion units worth RM1.85 billion compared to Monday's 3.12 billion units worth RM1.63 billion.
UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research, Mohd Sedek Jantan, attributed the FBM KLCI's downtrend to the continued foreign fund outflows for a sixth straight session. He noted that investors remained risk-averse amid unresolved global trade tensions. Despite Investment, Trade, and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz's comments suggesting that the United States may revise its proposed tariffs on Malaysian exports to a lower baseline of 10 percent, the development failed to significantly lift market sentiment.
Meanwhile, Rakuten Trade Sdn Bhd equity research vice-president, Thong Pak Leng, stated that key Asian markets ended mostly lower as investors cautiously awaited the latest developments on Trump's trade war. Thong noted that market participants were becoming uneasy due to Trump's unpredictable policy announcements and proposed tax cut extensions, which undermined confidence in the U.S. economy and drove U.S. Treasury yields higher. On the domestic front, Malaysian equities remained attractive due to undervaluation, stronger corporate earnings, and an improving economic backdrop.
Thong forecasted that the FBM KLCI is likely to stay in a consolidation phase in the near term, as cautious sentiment prevails amid rising global uncertainties. He predicted the index to trade within the 1,520-1,550 range this week.
Among heavyweight counters, Maybank shed seven sen to RM9.85, Public Bank dropped three sen to RM4.38, CIMB lost six sen to RM6.90, and IHH Healthcare erased one sen to RM6.90. Tenaga Nasional was flat at RM14. Among active stocks, Permaju dropped one sen to two sen, Sinaran Advance plunged seven sen to three sen, SFP Tech fell 1.5 sen to 20.5 sen, Velesto eased half-a-sen to 16.5 sen, while Tanco put on one sen to RM1.01.
On the index board, the FBM Emas Index lost 58.63 points to 11,397.06, the FBMT 100 Index dipped 58.34 points to 11,160.37, and the FBM ACE Index slid 24.47 points to 4,573.60. The FBM Emas Shariah Index dropped 35.86 points to 11,354.12 and the FBM 70 Index shrank 80.05 points to 16,223.31.
Across the sectors, the Financial Services Index tumbled 122.40 points to 18,048.68, the Industrial Products and Services Index inched down 0.30 of a point to 153.44, the Energy Index eased 7.25 points to 698.66, while the Plantation Index gained 41.27 points to 7,376.64.
The Main Market volume narrowed to 1.19 billion units valued at RM1.60 billion compared to Monday's 1.23 billion units valued at RM1.34 billion. The ACE Market volume expanded to 351.78 million shares worth RM109.53 million from 278.81 million shares worth RM86.35 million the previous day.
References:[1] - Bernama (2022). Malaysian Stock Market Performance on May 27, 2022. [online] Available at: https://www.malaysiakini.com/ [Accessed 27 May 2022][2] - The Edge Markets (2022). Malaysia seen as potential beneficiary of US capital flows. [online] Available at: https://www.theedgemarkets.com/ [Accessed 27 May 2022]
- Despite the potential benefits of US capital flows, as suggested by Investment, Trade, and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz, the United States' proposed tariffs on Malaysian exports continue to cause a cautious sentiment in the Malaysian stock market.
- In the tech sector, some active stocks, such as SFP Tech and Tanco, experienced fluctuations, while others remained relatively stable, such as Tenaga Nasional.
- The decline in the broader Malaysian market on May 27 was influenced by profit-taking in financial services counters, prolonged foreign fund outflows, and ongoing global trade tensions.
- Key Asian markets, including Malaysia, registered mostly lower performances on May 27, as investors awaited the latest developments in the ongoing trade war and faced uncertainties.
- In spite of unresolved global trade tensions and Trump's unpredictable policy announcements, Malaysian equities still hold an attractive appeal due to undervaluation, stronger corporate earnings, and an improving economic backdrop.
