Malaysian share prices closed 0.55 percent lower on Wednesday with a sharp decline overnight on Wall Street weighing on sentiment, dealers said. Plantation majors extended losses after crude palm oil futures traded on the derivatives market dropped in volatile trade, they said.
The Kuala Lumpur Composite Index lost 7.55 points to 1,353.03 and volume traded was 1.144 billion shares worth 1.897 billion ringgit (545.98 million dollars). Losers led gainers 494 to 361, with 294 stocks unchanged. The ringgit was at 3.4748/4798 against the dollar at the close.
Gerald Ambrose, managing director of Aberdeen Asset Management, said the outlook for the bourse looked positive based on Malaysia's solid economic growth. However, developments in overseas markets will continue to dictate the broader market's performance, as "people are taking too many risks," said Ambrose.
"If something goes seriously wrong, such as a sharp rise in the Japanese yen, there could be an immediate price weakness in stock markets," he said. Ambrose also said there were speculative elements in the share prices of palm oil companies.
"At this level, it is hard to distinguish where the real demand is and what are the right prices," he said. Crude palm oil prices will remain highly volatile going forward, but rising demand from emerging economies, particularly China and India, will pose long-term upward pressures on palm oil prices, he said.
IOI Corp was down 0.15 ringgit at 5.45, United Plantations fell 0.30 ringgit to 14.40 and Asiatic lost 0.15 ringgit to 6.50. Among blue chips, Maybank shed 0.10 ringgit to 12.20, Tenaga lost 0.30 ringgit to 11.30, while Telekom Malaysia was flat at 10.10.
National carmaker Proton closed flat at 6.10 ringgit off a high of 6.35 after Prime Minister Abdullah Ahmad Badawi said a recent meeting between Malaysian officials and Volkswagen AG over a possible tie-up was positive.
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