KUALA LUMPUR: Bursa Malaysia extended its losses at Monday’s closing, with local equities not spared from the Brent crude oil crash, trading at roughly 20 per cent lower at US$36.07 per barrel.
A dealer said it is uncertain how long the tumbling oil price would prolong, as the oil supply risk could further worsen demand due to COVID-19.
At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) gave up 58.94 points to 1,424.16 from Friday’s close of 1,483.10.
This was the lowest level last seen in 2011.
After opening 23.29 points lower at 1,459.81 this morning, the local index moved between 1,422.65 and 1,459.81 throughout the day.
On the broader market, losers overwhelmed gainers 1,139 to 120, with 127 counters unchanged, 612 untraded and 17 others suspended.
Turnover increased to 6.66 billion shares worth RM3.62 billion from 2.65 billion shares worth RM2.29 billion.
AxiCorp chief market strategist Stephen Innes said that if a new production compliance agreement between the Organisation of Petroleum Exporting Countries and Russia is not reached soon, oil prices could speed down to and possibly through the lowest levels of 2015/2016.
“It surely seems inevitable that the US virus (COVID-19) headcount numbers will climb substantially higher from current levels, possibly in an explosive way, once testing is rolled out on a large scale. The oil market could remain under pressure for the foreseeable future until maybe Russia and the Saudis walk back their new world order for oil threat,” he said.
Malaysia, which is an oil exporting country, was badly impacted with state oil and gas company Petronas saw shares of PetChem declining RM1.25 to RM4.40, PetDag dropping RM1.18 to RM20.90 and PetGas sliding 44 sen to RM15.70.
Research houses have also downgraded the oil and gas sector to ‘underweight’ from ‘overweight’ and from ‘overweight’ to ‘neutral’ following the aggressive oil price war launched by Saudi Arabia.
Meanwhile, back home, the Perikatan Nasional-led government has named its cabinet line-up, which investors hope would shed some light on its policies and directions.
“We might see some buying interest for political-linked stocks tomorrow,” a dealer said.
Regionally, Japan’s Nikkei index fell 5.07 per cent to 19,698/76, Singapore's Straits Times lndex eased 6.02 per cent to 2,782.65 while Shanghai’s Stock Exchange Index declined 3.01 per cent to 2,943.29.
Among the heavyweights, Maybank reduced 26 sen to RM8.24, Tenaga shed 10 sen to RM12.50, Public Bank fell 64 sen to RM17.02 and Petronas Chemicals erased RM1.25 to RM4.40.
Of the actives, Sapura Energy slipped 5.5 sen to 10.5 sen, Velesto Energy dropped 14.5 sen to 15.5 sen and Bumi Armada was 12 sen weaker at 16 sen.