KLCI dragged by last-minute profit taking

KUALA LUMPUR: The FTSE Bursa Malaysia KUALA LUMPUR COMPOSITE INDEX [] (FBM KLCI) fell 11.31 points to close at 1,255.66 points, dragged down by blue-chip stocks after a last-minute portfolio-rebalancing exercise by institutional funds.

Between 4.39pm and 4.50pm, the FBM KLCI lost seven points after several blue chip counters fell, in what appeared to be a last-minute profit-taking activity by fund managers, as they unwind their investments for the year-end.

CIMB Bhd, which was traded at RM12.94 at 4.39pm, fell 16 sen to RM12.78 by 4.50pm. The banking group lost 22 sen to closed at RM12.80 from last week’s close of RM13.02 with 5.12 million shares changing hands. IOI CORPORATION BHD [] fell eight sen between 4.42pm and 4.49pm to RM5.40 from RM5.48. It closed at RM5.40 — a drop of 14 sen — with 3.16 million shares done.

Another PLANTATION [] counter, SIME DARBY BHD [] fell 10 sen to RM8.89 from RM8.99 between 4.43pm and 4.49pm before ending the day 10 sen lower at RM8.89 with 5.14 million shares done. MALAYAN BANKING BHD [] fell six sen to RM6.72 at 4.50pm from RM6.78 at 4.40pm. The banking group closed at RM6.72, losing six sen from last week’s close, with 5.23 million shares changing hands.

Meanwhile, HONG LEONG FINANCIAL GROUP BHD [] fell 50 sen to RM7.30 with 775,000 shares done while HONG LEONG BANK BHD [] (HLBank) fell 43 sen to RM7.87 with 284,000 shares changing hands, after HLBank announced that Bank Negara Malaysia had no objections to its commencement of talks to acquire a stake in EON CAPITAL BHD [].

On the other hand, EON Capital closed 30 sen higher to RM6.88 with 2.38 million shares done. The counter had surged to a high of RM7.10 in early trading, following the latest news.

RHB Research Institute Sdn Bhd research head Lim Chee Sing said it is normal for institutional fund managers to unwind trading activities and chalk up gains as the year-end approaches.

“In the past few days, we have noticed that the market had seen last-minute pick-ups, mainly due to some window-dressing done by fund managers, but this is not sustainable.

“As expected, many fund managers are seen to be taking profit from their investments this week, as some of them would be closed for the year-end holidays,” he told The Edge Financial Daily on Dec 21.

Lim added that traded volume have also tapered off in the last few days, as some funds are closed for trading for the year-end holidays.

He said the drop in the FBM KLCI was also in line with the performances of bellwether Asian indices on Dec 21. Asian indices closed mixed on Dec 21, as trading sentiment was expected to be lacklustre for the remaining days of the year.

on Dec 21, the Hang Seng Index fell 227.78 points to close at 20,948.1 points while the Straits Times Index lost 15.78 points to 2,786.81 points, as investors wrapped up their portfolios for the year.

Most Asian currencies were also down, mainly due to the strengthening of the US dollar, following more optimism in a brighter US economy.

Jakarta Composite Index plunged 78.19 points to 2,431.39 points on Dec 21, after the rupiah fell 0.4% to 9,510 rupiah to US$1 (RM3.44) — its lowest in a month — that prompted the central bank to intervene.

Dealers said the Indonesian central bank had offered between 9,490 rupiah to 9,510 rupiah to support the currency, which was later stabilised at 9,490 rupiah.