KLCI reverses gain on glove share drop as investors weigh MCO re-enforcement

KLCI reverses gain on glove share drop as investors weigh MCO re-enforcement
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KUALA LUMPUR (May 4): The FBM KLCI closed down 2.48 points or 0.16% at 1,588.25 today partly on profit taking in rubber glove manufacturers' shares and as investors weighed the rising number of Malaysia’s new Covid-19 pandemic cases, which compelled the government to re-enforce the movement control order (MCO) across six districts in Selangor to curb the outbreak.

At 5pm, the KLCI closed lower after rising to its intraday high at 1,597.42 as investors bargain hunted for shares of glove manufacturers like Top Glove Corp Bhd, Supermax Corp Bhd and Hartalega Holdings Bhd before taking profit from these shares in the afternoon.

“Today is a trading day for KLCI, starting with the market trading positively in the morning session due to hastened bargain hunting in rubber glove stocks following the sharp sell-down in the past two trading days. 

“However (today), the trends were reversed to negative as investors opted for profit taking in the afternoon session,” MIDF Amanah Investment Bank Bhd research head Imran Yassin Md Yusof told theedgemarkets.com today.

Across Bursa Malaysia today, trading volume stood at 7.48 billion shares worth RM4.13 billion.  

Among glove manufacturers, Top Glove’s share price closed down three sen or 0.55% at RM5.45, Supermax declined six sen or 1.02% to RM5.82 while Hartalega fell five sen or 0.5% to RM9.93.

KLCI constituents Top Glove, Supermax and Hartalega are also members of Bursa’s Health Care index, which closed down 0.53%.

The government announced today the re-enforcement of the MCO across Selangor's districts of Hulu Langat, Petaling, Gombak, Klang, Kuala Langat and Sepang from Thursday (May 6) to May 17 as the number of newly-confirmed Covid-19 cases today across Malaysia rose to 3,120 from 2,500 yesterday.

Today, Bernama, quoting Senior Minister (Security) Datuk Seri Ismail Sabri Yaakob, reported that the three remaining Selangor districts, namely Kuala Selangor, Sabak Bernam and Hulu Selangor, will continue to be under the conditional MCO.

“In curbing the spread of Covid-19, the government always re-evaluates the MCO, especially in states which record a spike in positive cases.

“The Selangor state government, through the Menteri Besar and Selangor State Security Council, had tabled for the implementation of the MCO in Selangor,” Ismail Sabri was quoted as saying during a media conference at Putrajaya today.

Global share and commodity markets took cues from signs of recovery from the Covid-19 pandemic as major economies around the world reopen although India’s number of newly-confirmed Covid-19 cases rose.

It was reported that Asian share markets were mostly positive today as investors looked to signs of recovery from the coronavirus pandemic as major economies around the world reopen. 

"MSCI's broadest index of Asia-Pacific shares outside Japan was just 0.13% higher in the Asian afternoon session in trading thinned by holidays in China and Japan. 

"Oil prices rose on Tuesday after more US states eased lockdowns and the European Union sought to attract travellers, helping to offset concerns over fuel demand in India as Covid-19 cases soar,” Reuters reported.

Chong Jin Hun