The FTSE Bursa Malaysia KLCI Index slid 0.6 per cent to 1,839.39 at 10:58am local time, poised for the lowest close since March 21. Palm-oil producer IOI Corp dropped 1.8 per cent to lead declines in the measure.
Foreign funds sold RM635.8 million (US$196 million) of Malaysian equities in the five days through Sept. 19 to cap a third straight week of net sales, according to MIDF Amanah Investment Bank Bhd. in a report yesterday. Weak earnings prospects and high valuations may limit any stock gains, said Alexander Chia, an analyst at RHB Research Institute.
“Foreigners have been selling. There are no new catalysts to drive the market higher. Clearly the budget is in focus,” Chia said by phone in Kuala Lumpur. “The advancement of the market has been constrained by toppish valuations as price multiples have expanded while earnings have not followed.”
Malaysia will unveil its budget for 2015 on October 10. The KLCI trades at 15.8 times 12-month projected earnings, compared with 12.7 times for the MSCI Asia Pacific Index, data compiled by Bloomberg show. The Malaysian gauge has declined 1.5 per cent this year, the worst performer in Southeast Asia.
Profits at companies in the KLCI will grow 5.5 per cent over the next 12 months, compared with an 8.5 per cent gain for stocks in the MSCI Asia Pacific Index, according to data compiled by Bloomberg. — Bloomberg
