Monday, March 10, 2008

KL share market slumped

By Biz Times

MALAYSIAN shares plunged 9.5 per cent today in a session marked by a one-hour trading suspension as surprise weekend election results shook the stock market, dealers said.

Trading was halted when the stock market fell 10 per cent during the day, after the Barisan Nasional coalition lost its two-thirds majority in parliament.

It was the biggest decline in a decade, since stocks dived 21 per cent in a single session at the height of the Asian financial crisis in September 1998.

Bursa Malaysia said the stock market was suspended between 2.58 pm and 3.58 pm, when the 10 per cent drop triggered a failsafe.

The losses continued when trading resumed, but by the end of the session the Kuala Lumpur Composite Index had recovered slightly and closed down 123.11 points to 1,173.22.

Yeah Kim Leng, group chief economist with RAM Holdings Bhd, said the dramatic fall, which was also compounded by fears of a US recession, had been much steeper than anticipated.

“I only expected the bourse to dive by five per cent Monday,” he said.

Dealers said there was some element of panic selling but that volume was still manageable and that the selldown was confined to blue chips and big caps.

The worst-hit sectors were construction, services and property.

Declining stocks overwhelmed advancers 905 to 26, with 62 stocks unchanged and 435 counters untraded. Trading volume totalled 1.2 billion shares, valued at RM3.2 billion.

The construction sub-index plunged 15.8 per cent or 40.7 points to 217.41 while the property sub-index dived 9.2 per cent or 77.4 points to 761.93. The services sub-index tumbled 9.7 per cent or 16.94 points at 157.36.

Yeah said the bourse was expected to head south for the next few days but that it would later rebound.

“The Barisan Nasional is still in power and the country’s economic fundamentals remain intact,” he said.

Among construction and property stocks, Malaysian Resources Corp sank 66 sen or 34.0 per cent to RM1.27 and Equine Capital dived 72 sen or 50.4 per cent to 71 sen.

National power company Tenaga tumbled 1.30 sen or 15 per cent to RM7.35, while Telekom Malaysia shed 95 sen or 8.7 per cent to RM9.95.