Our Malaysia stock market history have shown that there’s always a bull rally during the election period. One of the leading themes for Bursa Malaysia this year would be politics. The expectations for the upcoming elections has ignited a rally and analysts believe that trading opportunities exist in the pre-election rally. In the past, companies that were government linked were among the big players in the stock market.
- Blue chips closed on a strong note on Tuesday, the eve of the closely-contested General Election, with local fund buying seen in key stocks including CIMB, Maybank and Axiata.
- Consumer stocks were among the top gainers. Nestle rose RM1.90 to RM137, Ajinomoto 25 sen higher at RM22.40.
- CIMB was the biggest mover among the KLCI stocks, gaining 23 sen to RM6.90 and pushed the index up 3.87 points, Maybank gained 16 sen to RM10.70 and nudged the KLCI up 3.14 points while Hong Leong Bank, RHB Bank and Public Bank gained 18 sen each to RM18.62, RM5.27 and RM23.88 respectively. and AmBank climbed four sen to RM3.72.
- Crude palm oil for third month delivery rose RM9 to RM2,392 per tonne. As for plantations, PPB Group rose 10 sen to RM19.16, KL Kepong two sen higher at RM25.38 and IOI Corp fell two sen to RM4.67.
- Most key Asian markets also ended Tuesday on a strong note, with Hong Kong stocks advancing as fears of a full-blown trade war eased on reports that talks between Washington and Beijing will continue.
With election fever heating up, stocks that are politically-linked have started showing signs of strength despite the volatile global market. Coupled with the fact that most stocks have fallen, thanks to the Dow Jones’ steep correction in the last two weeks, it might be a good idea to start positioning oneself in stocks that are deemed beneficiaries of the ruling government.
The FBM KLCI was showing signs of life on Thursday when it added 3.35 points to close at 1,838.28. Year to date, it is now up 2.31% or 41.47 points.Another diversified government-linked company which has seen some action is KUB Malaysia Bhd. While its allure has decreased over the last few years due to staid earnings, the stock continues to garner some interest.The stock is 52.17% owned by Anchorscape Sdn Bhd. At its last price of 44 sen, it is up 5 sen or 12.82% on a year-to-date basis.
At last Friday’s close of 1,786.33, the FBM KLCI is now about 107 points or 5.6% away from its all-time high of 1,893 points posted in July 2014. Year to date, the key index has risen 8.8%.
Top 10 Stock watchlist
1. Axiata Group Berhad (6888.KL)
2. Cahya Mata Sarawak Bhd (2852.KL)
3. Destini Berhad (7212.KL)
4. DRB-Hicom Berhad (1619.KL)
5. Felda Global Ventures Holding Bhd (5222.KL)
6. Maxis Berhad (6012.KL)
7. My E.G. Services (0138.KL)
8. Prestariang Berhad (5204.KL)
9. UEM Sunrise Berhad (5148.KL)
10. Yinson Holdings Bhd (7293.KL)