INVESTORS seem to have put the issue of sustainability on the backburner judging from the fact that Bursa Malaysia was able to remain on the green territory for most of today’s morning trading session.
This is despite the local bourse having to contend with a fragile political landscape and overnight Wall Street slump, not to mention a steep dive in global oil prices.
Even Econframe Bhd which made its debut on the ACE Market fared reasonably well – passed with flying colours, so to speak – after closing the morning trade at 38 sen, up 10 sen or 35.71% from its initial public offering price of 28 sen.
The total door system solution provider currently helmed the list of today’s most active stock with 273.14 million shares exchanging hands.
The Dow Jones Industrial Average shed 650.19 points or 2.29% to close at 27,685.38 during yesterday’s overnight trading on the back of a broad sell-off in tandem with a record number of COVID-19 cases in the US and stalled stimulus talks amid the looming presidential election on Nov 3.
Like their stock barometer brethren, the Brent crude which is the global oil benchmark, contracted US$1.31, or 3.1%, to settle at US$40.46 a barrel on the ICE Futures Europe.
At the close of the morning session, the FBM KLCI held steady above the psychological 1,500-mark at 1,500.16, up 5.55 points or 0.37% with the number of gainers outpacing losers by 5:2. The benchmark index had traded between 1,489.98 and 1,504.21 during the entire session.
Malacca Securities Sdn Bhd head of research Loui Low observed that today’s trading activities tended to centre on healthcare stocks (including glove-related counters) in view of the escalating number of COVID-19 cases in the US and European region.
“It will be hard to say whether the movement is broad-based or otherwise,” he told FocusM.
“Most of the times, if the healthcare counters are up, other stocks will follow suit or the market tone will be positive.”
UOB Kay Hian Research head Vincent Khoo opined that while market sentiment might remain cautious amid political uncertainties through to the Budget Day (Nov 6), stocks are expected to rebound as investors shift their focus to the upcoming results season, and in particular, “the spectacular quarter-on-quarter earnings growth of glove manufacturers”.
“We maintain our year-end FBM KLCI target of 1,600 which also incorporates the expected headways made on a COVID-19 vaccine discovery,” he noted in a market strategy note.
Khoo’s observation was validated with Hartalega Holdings Bhd delivering sterling results for its second quarter ended Sept 30, 2020 by posting a net profit of RM550 mil or a 428% jump from RM104 mil in the same period last year.
For the first half of the financial year, the group recorded a net profit of RM771 million, up from RM198 million in last year’s corresponding period.
“The group’s performance was propelled by higher sales revenue on the back of increased sales volume and higher average selling price. This was further supported by improved production efficiency,” the glove maker said in a media statement. – Oct 27, 2020
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