Monday, March 10, 2008

KLSE Index Down 10%

Malaysian stocks tumbled the most in a decade today with government-linked companies hardest hit after the weekend’s political upsets. At 2:58pm, trading was stopped for an hour as the Kuala Lumpur Composite Index (KLCI) fell by 10 percent or 130.01 points to 1,166.32, from the previous day’s closing level. This was the biggest one-day percentage loss in recent years. The turnover was valued at RM2.47 billion.State-owned banks like Bumiputra-Commerce Holdings Bhd and government-linked companies such as Malaysian Resources Corp, UEM World Bhd and Sime Darby were among counters that registered falling prices.According to a statement from Bursa Malaysia Securities Bhd, the decision to halt trading is to maintain market stability and allow traders to consider new information before making investment decisions. When the KLCI registers a 10 percent drop from the previous day’s closing level, the circuit breaker is automatically triggered. Trading resumed at 3:58pm. However, as investors unloaded local stocks, credit rating agencies Fitch and Moody’s maintained their sovereign ratings on Malaysia. Despite acknowledging that the level of political uncertainty in the country had increased, the agencies said the economy is still on solid ground.

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