KUALA LUMPUR, 24 February 2020 – The FBM KLCI further extended its loss this afternoon amid heavy trading volume as news emerged that Prime Minister Tun Dr Mahathir Mohamad had tendered his resignation around 1:20pm today.
The world’s longest bull run is set to end its 12-year reign as political upheaval has helped push Malaysian stocks down more than 20 per cent from their peak.
The Prime Minister’s Office in a statement said Dr Mahathir had tendered his resignation where the letter had been delivered to the Agong and he is set to meet Agong at 5pm today.
The FTSE Bursa Malaysia KLCI Index was down 2.5 per cent as of the 12:30 pm break, extending the drop from its April 2018 all-time high to 21 per cent. The benchmark had been in a bull run since 2008, rebounding from the global financial crisis to weather the European sovereign debt crisis, the U.S.-China trade war and Malaysia’s first change of government since independence.
At 2.35pm, the FBM KLCI was down 39.51 points to 1,491.69.
The top losers included Carlsberg Brewery Malaysia Bhd, Heineken Malaysia Bhd, Dutch Lady Milk Industries Bhd, Kuala Lumpur Kepong Bhd, Public Bank Bhd, PPB Group Bhd, Panasonic Manufacturing Malaysia Bhd, Ajinomoto (M) Bhd, Tenaga Nasional Bhd and MISC Bhd.
Ultimately, concerns over whether Prime Minister Mahathir Mohamad will overhaul his ruling coalition coupled with global worries over the Covid-19 outbreak have finally pushed the index toward bear territory. The prospects of Malaysia’s growth continuing to slow from a decade-low has also pressured the stock gauge this year, after a 6.0 per cent fall in 2019, which was the worst performance by a major Asian stock market.
“The only thing which is certain is that there is a lot of uncertainty. It will weaken the investor sentiment. It will make valuations and earnings worse amid the virus outbreak.”
Danny Wong Teck Meng, Chief Executive Officer at Areca Capital Sdn.
The nation’s largest stocks were among the biggest drag on the index Monday, with Public Bank Bhd, Tenaga Nasional Bhd. and CIMB Group Holdings Bhd. each falling at least 3.3 per cent.
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