By YEOW POOI LING
PETALING JAYA: The KL Composite Index (KLCI) tumbled 14.1 points, or 1.6%, to 876.6 yesterday, off its intraday low of 868.7, after Malaysia released on Friday weaker-than-expected gross domestic product (GDP) growth of 0.1% for the fourth quarter, dragging the full year GDP growth to 4.6% for 2008.In addition, corporate earnings released last month were mainly a disappointment, which did not bode well for sentiment.
Losses on Bursa Malaysia were mainly led by heavyweights. Malayan Banking Bhd (Maybank) fell 14 sen to RM4.96, TM International Bhd lost 33 sen to RM2.69, Bumiputra-Commerce Holdings Bhd dropped 35 sen to RM6.55 and Public Bank Bhd declined by 30 sen to RM8.50.
Major Asian bourses were also weaker yesterday following Dow Jones Industrial Average’s almost 120 points’ drop on Friday.
Japan’s Nikkei 225 was down 3.8%, the Hang Seng Index fell 3.9%, Singapore Straits Times Index declined 4.4% and Korean Kospi decreased 4.2%.
Jupiter Securities Sdn Bhd head of research Pong Teng Siew said reports of HSBC Holdings plc planning to raise US$17.7bil caused a stir in the region, fuelling concern that more banks could follow suit to recapitalise their operations.
Friday’s economic data from Bank Negara also showed that Malaysia was not totally immune to the crisis, he told StarBiz.
Meanwhile, selling pressure on Maybank and TMI was due to the companies’ proposals to raise capital via rights issues, he said. Such an exercise was “not timely” as it would dilute earnings and might dampen share prices.
“Maybank, however, has a different situation (than HSBC) as it had completed several acquisitions overseas. If it were to maintain its key capital ratios, it would need to raise more capital,” Pong said.
Aseambankers head of research Vincent Khoo said there were more downside risks in the region, which would weigh down on the equity markets. “Let’s hope the upcoming stimulus package will make a difference to the economy,” he added.
OSK Investment Bank in a report yesterday said the market would remain volatile this month with some upside ahead of the March 10 mini-budget announcement and the Umno general assembly towards month-end.
“Investors are waiting with keen interest to see what will be unveiled in the mini-budget. While a direct impact on the market may be limited, we anticipate some excitement for the construction, healthcare and education sectors,” it said, adding that the stimulus could range from RM10bil to RM33bil.
Expectations include a 2% corporate tax cut, 2% interest rate on soft loans to companies, RM5bil in loans and grants to assist small and medium enterprises as well as 50% reduction in corporate contribution to the HR Development Fund.
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