Rumours continue to spook market, says analysts
Yoon Szu-Mae and Chong Yen LongPublished: May 3, 2001 8:08 AM | Updated: Jan 29, 2008 6:21 PM
Speculation over Daim Zainuddin's resignation from the Cabinet continues to cause uncertainty, and this will affect the stock market adversely, according to two analysts today.
An economist who provides profolio investment advice said that any political instability will bring the market down, and this is reflected in the decline over the past two weeks.
"The jump of 11.98 points today at lunchbreak from yesterday's close is more a technical correction and I expect the weak sentiments will continue next week with a fall of at least 10 points," he said.
Political uncertainties, especially in Umno, were the main factor governing the present downtrend, which would only stabilise in three to four weeks, he added.
The Asian Wall Street journal in a May 26 report said that Daim could resign as finance minister because of major differences with Prime Minister Dr Mahathir Mohamad on economic issues such as the appointment of Bank Negara government, the aborted Singtel-Time Engineering deal, bank mergers and a new finance ministry directive ("[#1]KLSE may fall furrther due to 'political un certainties'[/#]", May 26).
The decline of KLCI by about 100 points over the past two weeks prompted a comment by Daim yesterday that investors would be "confused" with too many rumours, with the media helping these rumours along by publishing them (New Straits Times, June 9).
Yesterday the KLCI closed at 842.24 points, a fall of 13 points from Wednesday's close and 108 points down from May 20's 950.62 points.
The latest round of rumours on Daim's rifts with Mahathir have the potential to cause negative impact on the KLSE, according to Alyce Chan, research director for Mohaiyani Research.
Chan told malaysiakini that since retail investors are particularly sensitive to sentiment and they dominate the local market up to 70 percent, rumours have the potential to cause great damage.
However, Chan does not believe that this particular speculation over the Daim-Mahathir relationship will impact too strongly for the future.
"Daim's re-entry into government was always considered a temporary move, uncertainty will be limited because a possible resignation has already been factored into the market."
"Even if he (Daim) does resign, it wouldn't cause too much of a negative impact in the market," she added.
An economist who provides profolio investment advice said that any political instability will bring the market down, and this is reflected in the decline over the past two weeks.
"The jump of 11.98 points today at lunchbreak from yesterday's close is more a technical correction and I expect the weak sentiments will continue next week with a fall of at least 10 points," he said.
Political uncertainties, especially in Umno, were the main factor governing the present downtrend, which would only stabilise in three to four weeks, he added.
The Asian Wall Street journal in a May 26 report said that Daim could resign as finance minister because of major differences with Prime Minister Dr Mahathir Mohamad on economic issues such as the appointment of Bank Negara government, the aborted Singtel-Time Engineering deal, bank mergers and a new finance ministry directive ("[#1]KLSE may fall furrther due to 'political un certainties'[/#]", May 26).
The decline of KLCI by about 100 points over the past two weeks prompted a comment by Daim yesterday that investors would be "confused" with too many rumours, with the media helping these rumours along by publishing them (New Straits Times, June 9).
Yesterday the KLCI closed at 842.24 points, a fall of 13 points from Wednesday's close and 108 points down from May 20's 950.62 points.
The latest round of rumours on Daim's rifts with Mahathir have the potential to cause negative impact on the KLSE, according to Alyce Chan, research director for Mohaiyani Research.
Chan told malaysiakini that since retail investors are particularly sensitive to sentiment and they dominate the local market up to 70 percent, rumours have the potential to cause great damage.
However, Chan does not believe that this particular speculation over the Daim-Mahathir relationship will impact too strongly for the future.
"Daim's re-entry into government was always considered a temporary move, uncertainty will be limited because a possible resignation has already been factored into the market."
"Even if he (Daim) does resign, it wouldn't cause too much of a negative impact in the market," she added.
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