Bursa firms shed RM26b amid global markets bloodbath

By Lee Wei Lian
The Malaysian Insider
Aug 05, 2011

KUALA LUMPUR, Aug 5 — Today’s global market sell-off wiped an estimated RM26 billion from the KL stock exchange as investors took the cue from the regional meltdown following the rout on Wall Street yesterday.

Trader terminals were a sea of red today as losers vastly outnumbered gainers 934 to 60 while the broad-based Emas index shed 1.89 per cent to hit 10,478, a level not seen since May.

The benchmark FBMKLCI slipped 1.45 per cent to 1524, also its lowest level since May.

“If the Dow has another down day, things won’t look too good,” said Chris Eng, head of research at OSK Research.

One trader told The Malaysian Insider that the US jobs data report that was to be released today and was expected to see the unemployment rate in the world’s biggest economy remain unchanged, could send more jitters through the US market.

“Luckily we are off for the weekend,” he said.

The KL market has traditionally been seen as a defensive and “boring” market due to the dominance of government institutional funds, which causes a lack of liquidity.

This likely means that government-linked investment funds such as EPF and

PNB had a high exposure to today’s massive selldown.

Eng said that given the outlook for the global markets, any slight rebound from today would be an opportunity to sell.

All eyes will now be on August manufacturing data, traditionally a time when production picks up to cater for orders for the year-end holiday season.

If the August manufacturing data does not show an improvement over July, fund managers could be spooked into thinking the global economic recovery has stalled.

“If that happens, today’s tailspin is just the start of a possible bear market after three years of a stock market rally,” said the trader.

The Dow and the S&P index fell over 4 per cent yesterday due to recession fears in the United States and that Europe’s sovereign debt crisis could spread to Italy and Spain.

Asian markets were dragged down after panic set in due to the sell-off in the US.

Regional bourses were more badly hit, however, due to the defensive nature of the KL bourse.

About A$55 billion (RM173 billion) was wiped off the Sydney stock exchange, while Indonesia’s sharemarket fell 4.86 per cent, Singapore 3.61 per cent and Bangkok 2.73 per cent.

Northeast asian markets were also badly hit, with Shanghai down 2.2 per cent, Hong Kong 4.3 per cent, Japan 3.7 per cent, Taiwan 5.6 per cent and South Korea 3.7 per cent.

Reuters reported this evening that US$2.7 trillion (RM8.13 billion) was wiped off the value of world stocks this week.

After the sell-off today, the KL share market is down an estimated RM34 billion from Monday.

  1. #1 by yhsiew on Friday, 5 August 2011 - 8:34 pm

    Let us see how well the government has prepared for the onslaught this time.

  2. #2 by raven77 on Friday, 5 August 2011 - 9:19 pm

    This is not the time to buy property…and better offload if you are up to your eyeballs on loans…

  3. #3 by dagen on Friday, 5 August 2011 - 9:45 pm

    I think we should be able to withstand this one. (1) we have angkasawan. (2) we have submarines. (3) we have gold and platinum lined yatch. (4) we have diamond ring and bangles. (5) we have designer handbags. Oh any one of these would be enough to fight off the meltdown.

  4. #4 by boh-liao on Saturday, 6 August 2011 - 12:10 am

    No worries 1, when we r short of duit 4 rakyat, Losima will offer 2 sell her rings n hand bags, n d proceeds will go 2 rakyat

  5. #5 by k1980 on Saturday, 6 August 2011 - 7:00 am

    when we r short of duit 4 rakyat, Losima will scream to Jib “Boh-liao, Boh-liao” and raise the taxes e.g. 6% service tax will become 25% service tax

  6. #6 by Joshua on Sunday, 7 August 2011 - 8:49 pm

    we need a totally new Govt IGGG quickly.

    Miracle would follow suit.

    levelt Retreat

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