Facing multiple challenges, Malaysia's stock market experienced its largest monthly decline in 2 years during the budget month.

南洋商报 NYSP wrote a column · Oct 31, 2024 18:17

Facing multiple challenges, Malaysia's stock market experienced its largest monthly decline in 2 years during the budget month.

In the budget month of October, the market had low expectations before the budget was announced, leading to a lackluster response afterwards. This resulted in a significant 2.85% drop in Malaysia's stock market in October, the largest in two years. Without exciting factors domestically and with external headwinds, maintaining the 1600-point mark in the new month may prove to be a tough challenge.

FTSE Bursa Malaysia KLCI Index $FTSE Bursa Malaysia KLCI Index (.KLSE.MY)$ Although the month of October started with gains, marked by a good beginning, it quickly reached its peak on the first day. Subsequently, the market was on a downward trend throughout the month; after the budget announcement on the 18th, the market experienced 7 consecutive days of declines. The month ended with the index reluctantly holding above 1600 points, closing at 1601.88 points, resulting in a decline of 47.03 points or 2.85% for the whole month; the last time it dropped more sharply was in September 2022, when it fell by 7.77% for the entire month.

In October, the main factors affecting market sentiment include the ongoing campaign rallies for the presidential election in the USA, China's launch of multiple economic revitalization plans, and Prime Minister Datuk Seri Anwar presenting Malaysia's 2025 budget proposal.

Fong Long Investment Bank's Head of Retail Research, Wu Junsheng, stated in an interview with Nanyang Business Daily that taking the domestic situation as an example, the 2025 budget proposal is essentially a budget that cares for the people, with no major surprises overall, mainly laying the foundation for our country's economy and not greatly impacting the stock market.

He pointed out that conversely, from the budget proposal, several bearish factors can be seen, including adjustments to the minimum wage and the newly introduced dividend tax, all of which are affecting market sentiment.

Lack of major infrastructure stimulus.

"Actually, bearish factors are easily digested. However, the government's reduction in development expenditure to reduce the deficit ratio is causing some selling pressure in the market, especially on construction stocks, as the budget proposal does not mention major infrastructure projects much."

As for foreign aspects, he pointed out that in the USA presidential election campaign, any actions by either side will influence the election results and potentially impact the market heavily, thus the market sentiment has been in a state of uncertainty.

Veteran stockbroker Lu Wenhao stated that despite the countdown to the US election, investors seem to continue pushing up the three major indices in the USA.

$Nasdaq Composite Index (.IXIC.US)$

$S&P 500 Index (.SPX.US)$

$Dow Jones Industrial Average (.DJI.US)$

"Perhaps investors are concerned that after the election results are announced, there might be a significant adjustment in the US stock market, which could impact market sentiment and lead to major fluctuations in Asia-Pacific stock markets."

In November, Lu Wenhao expects that the Malaysian index will continue to decline as a whole, with support at 1600 points. If it falls below, it will target 1532 points.

Wu Junsheng believes that the resistance level of the index in November is 1625 points. If it breaks through, it will target 1650 points; the support level is between 1590 points, if it falls below, it will target 1550 points.

Trump's victory may not necessarily benefit Malaysia's stocks.

Lu Wenhao stated that the US election will be a major event, and the subsequent deployment will continue to affect market sentiment. As for who wins and its impact on Malaysia, he has not provided much insight, only urging investors to be prepared.

Wu Junsheng also mentioned that if Trump returns as president, it may not necessarily benefit Malaysia. China is one of Malaysia's major trading partners and is believed to be impacted to a certain extent.

"The extent of the impact is hard to predict because everything is still uncertain. However, if Trump wins and China faces a trade war, Malaysia may benefit. Such statements could be premature.

Entering the earnings season in November.

Wu Junsheng also mentioned that November will also enter the earnings season. At that time, investors can observe the company's outlook in real time and make investment decisions accordingly.

When asked about investment decisions, he mentioned that investors can focus on the consumer sector, as well as on bank stocks.

Lu Wenhao also agrees that the consumer sector will continue to strengthen, but investors need to further observe before making decisions.

$USD (USDindex.FX)$

$USD/MYR (USDMYR.FX)$

Information source: Nanyang Commercial Daily

Disclaimer: This content is for reference and education purposes only, and does not constitute any specific investment, investment strategy, or recommendation. Readers should bear any risks and responsibilities arising from relying on this content. Before making any investment decisions, be sure to conduct your own independent research and evaluation, and consult with professional advisors when necessary. The author and related parties are not responsible for any losses or damages caused by the use or reliance on the information contained in this article.

Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only. Read more

See Original

Report

333K Views

Comment

103667367 : Top floor view.

Report
Reply

Cancel Reply
Alen Kok : okay

Report
Reply

Cancel Reply
历史的垃圾时间 : The trading volume of horse stocks is indeed very low; it is completely untouchable.

Report
Reply

Cancel Reply

南洋商报 NYSP

Nanyang Siang Pau Official Account

《南洋商报》创立于1923年，是马来西亚历史最悠久的中文报纸之一。以财经及商业新闻为主，是商家与投资者必备的新闻资讯平台。

9294

Followers

Following

11K

Visitors