Bursa Malaysia sees continued surge in Trading Volume and Value
By Stella Goh – As published in Inve$t Malaysia 5 June 2020 issue
According to Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz, in line with the reopening of the economy which saw nearly 70% of the workforce returning to work in various sectors, Malaysia has the capacity that is set to spur an economy recovery in 2021. The International Monetary Fund (IMF) had forecast a 3% contraction in the global economy for this year due to the Covid-19 pandemic. The IMF managing director Kristalina Georgieva also stated that the global contraction might be even worse than the 3% forecast it made last month.
Prime Minister Tan Sri Muhyiddin Yassin is set to announce later today a slew of initiatives to kick start the economy. The short-term Economic Recovery Plan (ERP) will be focusing on three main goals ie (i) empowering the people (ii) propelling businesses and (iii) stimulating the economy.
Last Friday (29May), the local stock exchange’s daily traded value hit a record high of RM9.03 billion which surpassed its previous highest of RM9 billion in May 2018 with a turnover of 9.308 billion of shares. On Monday (1Jun), the FBM KLCI has gapped up 16.89 points or 1.15% to 1490.14 from previous Friday’s close of 1473.25, while the trading volume across Bursa Malaysia topped 10 billion securities for the second time in less than a month driven mainly by the rubber glove manufacturers.
On Tuesday (2June), both Maybank Investment Bank and RHB Bank Investment Bank Berhad tightened their share margin valuation on glove related counters following the recent rush for glove makers’ stocks which sent the stock prices to new heights. The margin financing caps will be imposed on the shares of Hartalega Holdings Berhad, Top Glove Corporation Berhad, Kossan Rubber Industries Berhad, Supermax Corporation Berhad, Rubberex Corporation Berhad and Comfort Gloves Berhad at a lower valuation compared to their current share prices. Share prices of those stocks took a temporary breather upon the announcement but appear to have recovered since.
On Wednesday (3June), the oil and gas (O&G) stocks dominated the list of most active stocks on Bursa Malaysia after oil prices reached a three-month high. It is expected that the Organization of the Petroleum Exporting Countries (OPEC) and Russia may extend the production cuts of 9.7 million barrels per day (bpd), equivalent to 10% of global output in July or August. The cuts are currently due to run through May and June, scaling back to a reduction of 7.7 million bpd from July to December but Saudi Arabia has been pushing to keep the deeper cuts in place for longer.
According to MIDF Research, Malaysia saw the third least foreign selling of RM13.3 billion for year to date (YTD) among seven Asian countries as foreign selling of Malaysian equities narrowed to RM663.8 million last week from RM714.7 million sold in the week before.
According to the Statistics Department, Malaysia’s exports declined faster than imports to RM64.9 billion, lower by 23.8% resulting in a trade deficit of RM3.5 billion.
This week, on Thursday (4Jun), the Ringgit strengthened to 4.2738 against USD from 4.3145 on Monday (1Jun). Meanwhile, the Ringgit was 3.0570 to the Sing Dollar on Thursday (4Jun). As at Friday (5Jun) 10:00am, the FBM KLCI was at 1550.65