Market Close KLCI, ringgit falter on China turmoil

by **Cals** Fri 08 Jan 2016, 00:10

Market Close
KLCI, ringgit falter on China turmoil
By Meena Lakshana / theedgemarkets.com | January 7, 2016 : 5:58 PM MYT

KUALA LUMPUR (Jan 7): The FBM KLCI fell 12.84 points or 0.8% after China's move to devalue the yuan and suspend share trades, dragged Asian equity markets down.
Reuters reported Asian stocks slid across the board on Thursday, after China again guided the yuan sharply lower; while Shanghai shares tanked more than 7% and triggered a stock market circuit breaker for the second time this week. Share trade was suspended for the rest of the day.
Shares in Asia extended losses and regional currencies sank on Thursday, after the People's Bank of China (PBOC)set the yuan midpoint rate at 6.5646 per dollar prior to the onshore market open, 0.50% weaker than the previous fix 6.5314.
In Malaysia, the KLCI settled at 1,655.13 points at 5pm. Across Asia, Hong Kong's Hang Seng fell 3.09%, South Korea's Kospi was down 1.1%, while Japan's Nikkei 225 dropped 2.33%.

Across Bursa Malaysia, 3.05 billion shares, valued at RM2.27 billion, exchanged hands. Decliners outnumbered gainers by 721 to 253, while 299 counters were unchanged.
Petronas Dagangan Bhd ([You must be registered and logged in to see this image.] Valuation: 1.10, Fundamental: 2.10) led decliners, while Fiamma Holdings Bhd ( Valuation: 3.00, Fundamental: 2.20) was the top gainer. Hubline Bhd ( Valuation: 0.30, Fundamental: 0.00) was the most actively-traded stock, with a trading volume of some 448 million shares.
Areca Capital Sdn Bhd's chief executive officer Danny Wong told theedgemarkets.com that KLCI’s volatility was expected to continue over the next one to two weeks, until China gains a foothold in stabilising its financial markets.
“The market (KLCI) will be up and down over the next week. It will take one to two weeks to see if China has made any progress in stabilising its markets,” Wong said.
In currency markets, the ringgit had earlier depreciated to its weakest point today at 4.4415 against the US dollar. The ringgit weakened in anticipation that the yuan devaluation would prompt other Asian economies to allow their currencies to weaken to maintain export competitiveness.

The ringgit had also weakened on lower prices of crude oil, which forms a crucial portion of the Malaysian economy.
Reuters reported Brent fell over 5% and around US$2 per barrel to a low of US$32.16 per barrel, a level not seen since April 2004, before edging back to US$32.23 by 0752 GMT.
Areca's Wong told theedgemarkets.com that crude oil prices would remain volatile on geopolitical factors involving major producers, Saudi Arabia and Iran.
“There is still room for oil prices to come down. The tension in the Middle East is making it harder for them to work as one voice,” he said.
(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.)