Analysts: Malaysia Stock Market May Remain Attractive to Foreign Investors
KLCI Above 1,720 Point Plateau
The Malaysia stock market reportedly gathered 3.3% or 55 points which caused it to close higher in the fifth consecutive session. The Kuala Lumpur Composite Index is now slightly above the 1,720 point plateau and the Index is projected to open even higher on Monday. Analysts have stated that breaking the 1,750 points connotes that the key index would become stronger and this would enable it keep up with the recent recovery.
On a global level, it is forecasted that the Asian market would have a mild gain due to the surge in prices of crude oil as well as general optimism about quarterly earnings. The Asian markets are reportedly following the leads of the U.S and European markets that surged higher last week Friday. The Kuala Lumpur Composite Index also closed higher on Friday as it recorded gains in the financial, plantations and telecoms sector. On the trading day, the index reportedly surged 1.08% or 18.36 points and finished at a high of 1,721.93 from a prior low close of 1,706.61. The volume was pegged at 3.3 billion shares that were worth 2.9 billion ringgit. Reports also indicate that there were 315 decliners and 605 gainers.
YTL Corporation had the highest surge with about 5.83 percent. Telekom Malaysia also surged by 4.62%. Axiata sharply increased by 2.71%. Petronas Chemicals added 1.06% , IOI Corporation sharply increased by 0.89% and Maybank added 0.11%. On the other hand, some other stocks such as Astro Malaysia Holdings and Public Bank remained unchanged.
On Wall Street, NASDAQ reached a new record high and the S&P 500 had its best closing level in about five months. The Dow increased by 0.38 percent or 94.52 points to close at 25,019.41, the NASDAQ surged higher by 0.03 percent or 2.06 points to 7,825.98 while the S&P 500 gained 0.11% or 3.02 points to 2, 801.31. For that trading week, the Dow added 2.3%, the NASDAQ climbed 1.8% and the S&P surged 1.5%.
Hesitations Due to Market Volatility
Sources claim that the trading records came after a period when traders were holding back on making major moves as a result of the volatility of the market in the past trading sessions. The Federal Reserve reportedly referred to the economic growth recorded in the first half of 2018 as solid, and maintained that there would be a continued increase in the interest rates. Also, the University of Michigan stated that there was a reduction in consumer sentiment for this month as a result of concerns about the likely effects of the trade tariffs.
The Labor Department also expressed that there was a decrease in import prices last month, but a slightly higher than anticipated increase in the prices of exported products. The sectors that recorded the most visible weaknesses were the banking and telecom sectors, while the energy sector gained owing to the surge of the crude oil price.
Analysts’ Opinion On Market Situation
Some analysts have opined that foreign investors are going to stage a major comeback because key index stocks currently offer cheap valuations. The cheap valuations is attributed to trade concerns about the effect of the trade disputes between the U.S and China. Nazarry Rosli, a stock market analyst, stated that the FBM KLCI was currently trading at a cheap valuation as compared to other regional markets.
According to Nazarry, this was because the forward PER of the index was still below the 10-year moving verage price-earnings ratio. Data from Bloomberg also reveals that the indexs forward PER was at 16.09 times while the average was at 19.24 times. Nazarry further added that the index could proceed on an uptrend to test the 1,750 resistance level points in the light of the current cheap valuation.
Redza Rahman, the MDIF head of Research, stated that the weak prices of stocks that pay dividend, including Telekom Malaysia Bhd, would be attractive to those investors who were on the look-out for defensive stocks. Other defensive stocks include, Malayan Banking Bhd, AirAsia Group, Public bank Bhd and CIMB Group Holdings. Redza, however, added that investors would likely still maintain caution on internal and external developments.
JP Morgan Asset Management also told media outlets that there is still time to remain optimistic about Asian stocks because valuations are currently very reasonable. However, Richard Titherington who is the Asia Pacifics chief investment officer for emerging markets , stated that a full-blown trade war would likely not happen and there was still normalcy in the global economic cycle.
More in Global Markets
Johnny Depp is Apparently Broke! Here’s How He Scorched His Entire Fortune
Back when the Pirates of the Caribbean franchise was the hottest thing in town, the movies’ main man, Johnny Depp, was...June 20, 2019
Reason Why Financial Advisors Need to Adapt to the Tech World
Most people think that money makes the world go round, this may be true in a way especially for those who...June 20, 2019
How Much a $1000 Investment in Apple 38 Years Ago Would be Worth Today
Current Worth Of Investment Apple recently debuted a new set of its updated products. The products include one MacBook Air and...June 20, 2019
Shell Reports Biggest Profits in 4 Years as Oil Prices Rise to Astronomical Levels
Royal Dutch Shell recently disclosed its third-quarter earnings, reporting a 37 per cent increase in revenue and highest profits in the...June 20, 2019
Gone with the Wind! Here’s How Mel B Lost Her Enormous Fortune
The English pop girl group, the Spice Girls, established their dominance with their debut single Wannabe which hit the airwaves in...June 20, 2019
Don’t Refinance Your Home without Doing These Five Things
Thinking of giving your home a major renovation or take advantage of low mortgage interest rates? Some might tell you that...June 20, 2019
Pro Tips for Building a Successful Investment Portfolio
Everyone wants a shortcut to success and happiness in life, and we often seek out secret tips and tricks that can...June 20, 2019
How to Prepare for an Unexpected Early Retirement
One of the reasons why people work so hard is so that when they retire, they would have enough money to...June 20, 2019
Kim Kardashian is Serving Some Serious Financial Advice, And We All Need to Take Note
Thanks to Vogue, Kim Kardashian’s fans have been able to explore the reality star’s Hidden Hills home, where she lives with...June 20, 2019