Market Close KLCI falls on China, crude oil

by **Cals** Tue 12 Jan 2016, 00:44

Market Close

[size=28]KLCI falls on China, crude oil

By Chester Tay / theedgemarkets.com | January 11, 2016 : 6:00 PM MYT

KUALA LUMPUR (Jan 11): The FBM KLCI dropped 20.02 points or 1.2% to its intraday low of 1,637.59 points as concerns on China's economic slowdown hurt crude oil prices and Asian share markets.

Such sentiment does not bode well for the ringgit as crude oil accounts for a crucial component of the Malaysian economy and government revenue. News on Moody's revision of Malaysian government debt outlook to "stable" from "positive" had also hit investor sentiment.

JF Apex Securities Bhd head of research Lee Chung Cheng told theedgemarkets.com: "Today's slump was still because of the worries on China's market and the volatility of oil price, the same reason for the past few market days."

"These external factors may overrule the upcoming festive sentiment like the Chinese New Year, which would boost consumption in the economy," Lee said.

Across Bursa Malaysia today, there were 300 gainers and 657 decliners. Total trading volume was 1.91 billion shares worth RM1.95 billion.

The top gainer was British American Tobacco (M) Bhd ([You must be registered and logged in to see this image.] Valuation: 1.50, Fundamental: 1.35) the leading decliner wasPetronas Gas Bhd ( Valuation: 1.70, Fundamental: 3.00). The most-active stocks included AWC Bhd ( Valuation: 0.50, Fundamental: 2.50) and Tiger Synergy Bhd ( Valuation: 0.90, Fundamental: 1.00).

In currency markets, the ringgit depreciated today to its weakest point against the US dollar 4.4250, tracking crude oil losses.

Reuters reported that Brent crude oil fell over 3% on Monday as China's economic slowdown dented the outlook for demand, with traders placing record bets on even lower prices as they increasingly lose faith in a significant market recovery.

Global benchmark Brent was down over a dollar and more than 3% at US$32.51 per barrel at 0736 GMT, and US West Texas Intermediate (WTI) crude was down over 2.5% at US$32.28.

Asian share markets fell. The spotlight was on China where Hong Kong's Hang Seng fell 2.76% while Shanghai Composite lost 5.33%.

Reuters reported that China was again the epicentre of unease as the People's Bank confounded analysts by guiding the yuan's mid-point rate sharply stronger, a move that might calm concerns about a competitive devaluation but only added to market confusion as to Beijing's ultimate intent on its currency policy.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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