Malaysian shares fall 10.5% in post-election reaction, trading halted for one hour

KUALA LUMPUR, Mon:

Malaysian shares fell 10.5 per cent when the market reopened after an earlier sharp fall triggered a halt to trade. Trading of shares were halted for an hour after falling by more than 10 per cent at mid-afternoon today.

The benchmark Kuala Lumpur Composite Index (KLCI) was last quoted at 1,166.32 after 28 minutes of afternoon trading. It declined 130.01 points or 10.03 per cent. 

The Securities Commission and Bursa Malaysia assured the public that market integrity remained intact despite activation of the circuit breaker. 

This, they said in a joint statement, has not impeded the resilience of the market. 

Trading resumed at 3.58pm. At the mid-day break, the KLCI was at 1,197.11, down 99.22 points or 7.76 per cent after opening 76.92 points lower at 1,242.64 this morning. 
Sentiment weakened following the victory of the ruling Barisan Nasional by a simple majority in Saturday’s general election, said some dealers. 

The Industrial Index fell 295.61 points to 2,451.93, the Plantation Index dropped 640.39 points to 7,094.96 and the Finance Index declined 846.00 points to 9,004.42. 

The FBMEmas Index was 882.71 points lower at 7,912.01, the FBM30 lost 879.55 points to 7,690.88, the FBM2BRD decreased 476.87 points to 5,617.54 and the FBMMesdaq went down 350.30 points to 4,551.65. 

Losers outnumbered gainers 857 to 19 while 51 counters were unchanged, 507 still untraded and 27 suspended. 

At the time that trading was halted, volume was at 913.552 million shares valued RM2.471 billion.

MRCB was the most actively traded stock, falling into limit-down area, losing 72 sen to RM1.21 with 729,971 lots changing hands.

It was followed by Gamuda which dropped 72 sen to RM2.82 and Tenaga Nasional which went down RM1.35 to RM7.25.

Among the heavyweights, Sime Darby lost RM1.95 to RM9.05, IOI Corp fell 75 sen to RM6.65 and Maybank declined 60 sen to RM8.35. 

Some 60 counters fell into limit-down territory, led by Cybertowers which was eight sen or 57.14 percent lower at six sen, Kumpulan Peransang Selangor which went down RM1.74 or 50.88 percent to RM1.68 sen and Equine Capital which dropped 72 sen or 50.35 percent to 71 sen.

Barisan Nasional won Saturday's general election by a simple majority. Analysts had widely expected it to win by a two-thirds majority.

"The stock market depends and relies on predictability and continuality. Any surprises on the downside are always not good for the market," MIMB Investment Bank research head Pong Teng Siew said when contacted yesterday.

Investors are already nervous as the market's benchmark has fallen 8.5 per cent over the past one month. Foreign investors have led the selling after research houses like CLSA cut its recommendation on Malaysian stocks, citing slower consumer spending.

However, there are also those who think that any selldown would be cushioned by the fact that most foreign funds trimmed their holdings recently.

OSK Research Sdn Bhd head Kenny Yee advised investors holding fundamentally good stocks to stay calm.

"There will be some knee-jerk reactions on Monday. I don't think investors should jump on the bandwagon ... investors shouldn't do anything drastic, as it will only make things worse," he said.

US stocks closed lower on Friday and this will further weigh on investors.

The Dow Jones Industrial Average closed 1.2 per cent to below 12,000 points, the first time in two months, after US Labour Department announced lower-than-expected job numbers.

It said on Friday that 63,000 non-farm jobs were cut in February, a huge contrast as economists had forecast for 25,000 new jobs.

"I think those who still thinks that the US is 'potentially' going into recession is living in denial ... the US is already in, if not heading, into recession," said an analyst.

Analysts expect stocks of firms with projects in Penang to be most affected. The opposition political parties gained control of five states, including Penang, in the polls.

--NST