By Ranjit Singh
THE FBM KLCI opened sharply lower by 22 points on the first day of trading after Tan Sri Muhyiddin Yassin was proclaimed as Malaysia’s eighth prime minister on Sunday.
At 5pm today, the index had climbed back to be 15.7 points lower at 1,467.
Phillip Mutual Bhd chief strategist Phua Lee Kerk tells FocusM that investors were taking a “sell first, think later” stance.
“I am of the view that the market is affected by a double whammy. One is the domestic uncertainty with the change in government. This results in investors awaiting the appointment of the new Cabinet to get a gauge of the policies that will be put in place,” said Phua.
He said the second factor affecting the market was the Covid-19 outbreak and whether the US Fed would cut rates. Market expectation is a cut of 50 basis points by the Fed when it meets in March.
The Monetary Policy Committee (MPC) of Bank Negara Malaysia will meet on March 4 and the general consensus is that it will lower interest rates again after doing so in its January meeting. The Overnight Policy Rate (OPR) stood at 2.75% currently and the central bank has the fiscal space to undertake another rate cut.
Phua said he was waiting for the dust to settle before making a decision on the market.
Among stocks that were actively traded today were Thriven Global Bhd and Eden Inc Bhd, both of which were associated with newly minted PM Muhyiddin.
Property developer Thriven’s annual report shows that Datuk Fakhri Yassin Mahiaddin, who is Muhyiddin’s son, owns an indirect 27.16% stake in the company via Ketapang Capital Sdn Bhd.
At 5pm, Thriven shares were traded at 31.5 sen, up 9.5 sen or 43%, with 69.6 million shares transacted. Meanwhile, Eden which was said to be associated with Muhyiddin’s in-laws was up 7.5 sen or 36% to 27 sen with 205 million shares changing hands. – March 2, 2020
