Market Close KLCI rises after Bank Negara rate cut; Maybank down
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Market Close KLCI rises after Bank Negara rate cut; Maybank down
- Market Close
[size=28]KLCI rises after Bank Negara rate cut; Maybank down
By Ahmad Naqib Idris / theedgemarkets.com | July 13, 2016 : 6:10 PM MYTKUALA LUMPUR (July 13): The FBM KLCI gained 6.42 points or 0.4% after Bank Negara Malaysia cut the overnight policy rate (OPR) to 3%, from 3.25%.
At 5 p.m., the KLCI closed at 1,660.39 points. The index reversed losses, after falling to its intraday low at 1,652.07 points.
Bank Negara said in a statement today that it had cut the OPR, due to slower global economic growth concerns. "Looking ahead, there are increasing signs of moderating growth momentum in the major economies," Bank Negara said.
Analysts said the stock market had gained from the interest rate cut, as a lower OPR rate was seen as an effective way to enhance economic and business growth. This
is because a rate cut would give respite to borrowers and heavily-geared entities.
“The gain in the index (KLCI) today is mainly on the OPR cut,"Inter-Pacific Securities Sdn Bhd research head Pong Teng Siew told theedgemarkets.com.
Across Bursa Malaysia, 1.71 billion shares worth RM2.37 billion were traded. Gainers beat decliners at 523 against 280.
Leading gainer was Panasonic Manufacturing Malaysia Bhd, while top decliner was British American Tobacco (M) Bhd. The most active counter was Vivocom Intl Holdings Bhd.
Banking shares fall
Banking shares fell on the OPR cut, in anticipation lower interest rates will affect banks' profitablity. Malayan Banking Bhd (Maybank) fell eight sen to RM8.12 to become the 10th largest decliner, while CIMB Group Holdings Bhd dropped six sen to RM4.32.
Real estate developers' shares however, gained, possibly on expectation lower interest rates will encourage consumers to take bank loans for property purchases. UEM Sunrise Bhd added six sen to RM1.09 to become the eighth most active stock, while UOA Development Bhd rose 30 sen to RM2.49 to become the third-largest gainer.
Real estate investment trusts' shares also rose as these dividend-yielding entities looked more attractive to investors, after the OPR cut. IGB Real Estate Investment Trust climbed nine sen to RM1.69.
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