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KLCI would have fallen 11% sans healthcare stocks, says Bursa chairman

08 Dec 2020 / 18:13 H.

KUALA LUMPUR: The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) would have fallen by 11 per cent year-to-November 2020, without the support from the three healthcare counters, said Bursa Malaysia Bhd chairman Tan Sri Abdul Wahid Omar.

The three FBM KLCI healthcare counters are Hartalega Holdings Bhd, IHH Healthcare Bhd and Top Glove Corporation Bhd.

Abdul Wahid said, thanks to the healthcare stocks, the FBM KLCI only declined 1.6 per cent year-to-November 2020, and Bursa Malaysia became one of the best performing emerging markets (EM) in ASEAN, apart from the Hanoi Stock Exchange.

“The healthcare index had surged 220.9 per cent year-to November 2020...So if we were to remove the performance from healthcare, especially the glove counters, the number will be quite different, meaning that the FBM KLCI would have fallen 11 per cent year-to-November 2020,” he said.

Abdul Wahid said this at the PowerTalk Webinar themed “Moving Forward: Banking and Capital Market Trends” organised by the World Islamic Economic Forum (WIEF) and Securities Industry Development Corporation (SIDC) here, today.

Moving into November-December, Abdul Wahd said glove counters had seen normalisation in their share prices after the sector’s price-to-earnings ratio (P/E) dropped to below 15 times from its peak of 45 times in August 2020.

However, moving forward, he expected demand for healthcare counters would continue to grow with or without COVID-19 due to greater awareness about hygiene.

“Manufacturers of personal protective equipment (PPE), including glove makers, might not see the same kind of volume seen in the previous months, but due to greater awareness about hygiene, the usage per capita of gloves and other PPE products would be higher compared to the pre-COVID-19 era,” he said.

Other than healthcare counters, Abdul Wahid said the Technology Index, which soared 72 per cent, as well as Industrial Products and Services Index (up 4.7 per cent), were the only two out of 13 Bursa Malaysia sectoral indices which posted positive growth from January to November 2020.

To recap, the FBM KLCI rebounded from a low of 1,219.72 on March 19, 2020 to a year-to-date high of 1,628.26 on Dec 3, 2020.

Meanwhile, Abdul Wahid said Bursa Malaysia and the brokers had also benefitted from the doubling of business volume during the pandemic.

He said in the first 11 months of 2020, the average daily value on Bursa Malaysia surged about 114 per cent to RM4.1 billion from about RM1.9 billion in 2019.

“We also saw significant retail participation, particularly by younger investors aged 26-45 who accounted for about two-thirds of the market participants.”

On the online trading perspective, he said 78 per cent of the retail trading were conducted online, making up 46 per cent of the overall trades, he said.

“This is something that is very encouraging and something that we have not seen before,” he added.

To ensure the sustainability of high retail participation seen in 2020, Abdul Wahid said Bursa Malaysia would continue to work closely with brokers, and make account opening as easy as possible.

Data from Abdul Wahid’s presentation slides showed that there were 18 new listings on Bursa Malaysia for the year-to-October 2020 period, raising total funds of RM5.99 billion compared with 30 new listings with RM6.66 billion funds raised in 2019. -Bernama

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