KLCI up ahead of policy changes

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KUALA LUMPUR (Jan 19): The benchmark FBM KLCI hit a two-week high today to close 9.74 points or 0.56% higher at 1,753.31 points, ahead of Prime Minister Datuk Seri Najib Razak's announcement of economic revisions and interventions amid the changing global economic landscape.

Najib, who is also Finance Minister, said the recent 60% fall in oil prices affects the global economy, and Malaysia is no exception. The benchmark Brent crude oil traded at levels of US$50 per barrel today, from levels of US$47 last week, and the ringgit traded at 3.5633 against the US dollar.

Oil and gas (O&G) counters saw some rebound in trading activity today, as Maybank Investment Bank Bhd (IB) said in a note that a stronger US dollar versus the ringgit favours O&G players with rigs, floaters, tank terminal and shipbuilding operations.

In turn, rig operators UMW Oil and Gas Corp Bhd (UMW-OG) (up 15 sen or 5.77%),  SapuraKencana Petroleum Bhd (up 13 sen or 5.20%) and Coastal Contracts Bhd (up 14 sen or 5.26%) as well as floaters such as Bumi Armada Bhd (up 2 sen or 1.67%), were on a positive trading trajectory today.

Overall, the market saw a total of 1.92 billion shares, valued at RM1.91 billion, traded during the day.

Market breadth was mixed with 507 gainers against 302 decliners, while 303 counters remained unchanged.

Today’s top gainers included Dutch Lady Milk Industries Bhd (up 54 sen or 1.2%), LTKM Bhd (up 45 sen or 10.47%), and DKSH Holdings (M) Bhd (up 29 sen or 5.28%).

Decliners were led by British American Tobacco (M) Bhd(down 86 sen or 1.28%) PPB Group Bhd (down 30 sen or 2.1%) and Hap Seng Consolidated Bhd (down 23  sen or 5.75%).

The most actively traded stock was Sumatec Resources Bhd (up 1 sen or 4.88%), with 77.28 million shares changing hands.

Maybank IB regional chartist Lee Cheng Hooi told theedgemarkets.com that the market was bid up by some banking stocks like  Malayan Banking Bhd (up 19 sen, or 2.21%), Public Bank Bhd (up 8 sen, or 0.46%), and CIMB Group Holdings Bhd (up 10 sen or 1.71%) and O&G stocks like SapuraKencana and UMW-OG.

“This is ahead of the Prime Minister Datuk Seri Najib Razak’s announcement of measures tomorrow on how Malaysia would tackle the question of lower crude oil prices,” said Lee.

The ringgit led losses among emerging Asian currencies today ahead of the expected announcement of policy changes by Najib.

According to Reuters, the ringgit’s fall against the US dollar was attributed to lower oil prices and the weakness of the Chinese yuan, which had fallen as shares tumbled after China’s regulators cracked down on its security products, and with China’s central bank setting its midpoint weaker against the greenback.

The report added that the ringgit had come under further pressure from the US dollar demand linked to daily fixing and bids for the Singapore dollar.

Regionally, Hong Kong’s Hang Seng was down by 1.51%, while Japan’s Nikkei was up 0.89% and South Korea’s KOSPI rose by 0.77%.