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Malaysian stocks down for second day on election talk

Publication Date : 23-01-2013

 

Malaysia's stock market fell for the second consecutive day, albeit less drastically, on speculation that Prime Minister Najib Razak would dissolve Parliament after Chinese New Year to make way for the 13th general election in March.

The FBM KLCI, the stock exchange's composite index, fell seven points to close at 1,628.66 points yesterday, as investors continued to sell on political uncertainty. It had shed more than 40 points, or 2.4 per cent, on Monday.

At the market close, the FBM KLCI had recovered slightly as some investors went bargain-hunting after the index fell 33.5 points in early trade to an intraday low of 1,602.12.

Total volume traded was 1.266 billion shares worth 2.227 billion ringgit (US$746 million).

A rebound in major stocks such as Axiata and CIMB helped the market recover. Felda Global Ventures, though still trading below its initial public offering price of 4.55 ringgit, closed higher at 4.50 ringgit compared with its opening price of 4.37 ringgit.

Fund managers said the market could continue to be buffeted by election uncertainties.

"Although the talk of elections has been around for some time, investors have yet to fully factor in the election jitters in the past, as they want the market to hold up for as long as possible," said Lim Suet Ling, UOB-OSK Investment Management's chief executive officer.

Clare Chin, head of research at CLSA Securities Malaysia, said investors were selling after the market hit record highs late last year.

"We believe the market has room for more profit-taking, but that should not be a major concern as the fundamentals of Malaysian companies are generally intact."

US$1 = 3 ringgit

 

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