Malaysia share market KLCI countinues falls as regional markets slump

KUALA LUMPUR: Shares on Bursa Malaysia fell on Tuesday, tracking a sharp fall in regional markets, especially Hong Kong, on deepening US economic and financial concerns.

Worries over the state of the US financial sector had deepened since late last week with the problems emanating from government mortgage giants Freddie Mac and Fannie Mae, and later the collapse of banking group IndyMac over the weekend.

This suggests the worst of the US credit crunch and losses emanating from the sub-prime crisis was far from over. Although the pain on Main Street would last a long while, many had hoped that the worst of the credit crunch had passed in March 2008, after central banks around the world pumped in enormous amounts of liquidity to keep global financial markets running.

With large losses around the region and growing external uncertainties, the local bourse could not escape the fallout. The KLCI fell 16.4 points to 1,127.6. Market breadth was negative with declining stocks beating advancing ones by a 2.5-to-1 ratio. Volume totaled 395 million shares - still low by past standards, but higher than Monday's 279 million shares, which was the year low.

The most actively traded stocks of the day include Media Prima, KNM, Gamuda, IOI Corp, TM, Sime Darby and Genting. Major gainers include Nestlé, MSC, Baneng, Star and Shell. Losers include large blue chips like DiGi, Genting, IJM, KFC, UMW and Tenaga. There was fairly heavy volume among the big caps, suggesting some institutional selling activities.

The outlook for Wall Street and global equities is cloudy for the near-term, and investors are likely to stay cautious. Thus, while many stocks are very attractively priced, investors are, unfortunately, not in any real hurry to buy, given the prevailing external and domestic uncertainties.