KUALA LUMPUR, Aug 6 — Glove counters continued to boost Bursa Malaysia, with FBM KLCI up 0.94 per cent or 14.99 points year-to-date.
RHB Asset Management Sdn Bhd (RHBAM) chief investment officer equity Mohd Fauzi Mohd Tahir said Top Glove and Hartalega jumped by 114.6 points and 69.2 points, respectively and combined they were up by 183.8 points.
He said ex-glove, the domestic index down 10.6 per cent.
However, he said the performance was relatively better compared to other ASEAN peers, also supported by recovery in manufacturing activities, exports and loan growth, among others.
However, he said the local market lagged behind Taiwan, Korea and China.
Taiwan and Korea performed better, supported by the technology sector and China because of strong domestic economy, he said during a webinar organised by RHBAM titled ‘Malaysia: Time for a Reality Check?’
Last year, the domestic index dropped 6.02 per cent or 101.82 points, with Top Glove and Hartalega down 4.48 points and 3.07 points, respectively or combined 7.42 per cent.
Ex-Top Glove and Hartalega, the FBM KLCI plunged 94.27 points.
Mohd Fauzi said the index has recovered well since touching its lowest of 1,219 on March 19, rebounded 32 per cent since then.
He said a few factors have resulted in the increase in the turnover velocity, average value, as well as volume traded on Bursa Malaysia, such as expectations of a further recovery in the economy following the government’s fiscal and monetary policies and strong domestic liquidity.
“This is especially from retail investors who are seeking higher returns due to low return from fixed deposits,” he said.
For the first half of this year, retail participation stood at 33 per cent, while institutional investors players in Bursa Malaysia decreased to 67 per cent from an average of 76 per cent over the past 10 years.
Credit Suisse Securities Malaysia head of research Danny Goh said retail investors helped absorb foreign selling in the market.
He said foreign investors sold RM18.5 billion worth of equities year-to-date.
Goh said bearish earnings and return on equity were among the reasons foreign investors shied away from the domestic market.
He said earnings estimates for all sectors are expected to be negative this year except for gloves.
As for the ringgit, Goh said it is expected to hover at the 4.2000 level in the next three months, following the weakening US dollar.
At 3pm today, the ringgit stood stronger at 4.1840 against the greenback.
Meanwhile, Macquarie Capital Securities head of Malaysian equity research and strategy Prem Jearajasingam expressed confidence that FTSE Russell will retain Malaysian bonds on its World Government Bond Index watch list.
The next review is due in September 2020. — Bernama