KUALA LUMPUR (June 23): Malaysian stocks rebounded from early losses on Monday, bucking a broad decline in Asian markets, thanks to gains of heavyweight banks while energy stocks rallied amid a surge in oil prices.
The benchmark FBM KLCI opened nearly 10 points lower, before falling to as low as 1,488.89 points, its lowest since April 22. The index then rebounded to a high of 1,509.77 points before pausing for midday break at 1,509.55 points, marking a 0.5% gain from Friday. The index closed at 1,516.61 points, marking a 0.92% gain for the day.
Energy and financial services were the only two sectoral indices in the green, standing out amid a sea of red across Bursa Malaysia. Public Bank Bhd (KL:PBBANK) led gains, climbing 4.99% to RM4.42, while CIMB Group Holdings Bhd (KL:CIMB) rose 2.26% to RM6.80.
Investors should brace for further downside in the stock market if the Iran-Israel military conflict escalates into a prolonged war, MIDF Research said.
There are still short-term trading opportunities in energy stocks, even as investors should stay defensive for the medium term amid the ongoing uncertainty, the house said.
Hibiscus Petroleum Bhd (KL:HIBISCS) climbed as much as 7% to RM1.83, while Hengyuan Refining Company Bhd (KL:HENGYUAN) rose nearly 4% to RM1.92. The Bursa Malaysia Energy Index, which tracks 31 stocks in the sector, was up over 1%.
Brent, the global benchmark for crude oil, is now trading at US$77.57 (RM333.16) per barrel, after rising more than 30% from this year’s low in May.
Analysts have been warning that any disruption in the Strait of Hormuz — through which about 20% of global oil supply passes — could trigger another surge in oil prices.
In the near term, Brent crude price could hit US$85 per barrel, driven by supply-side risks, said CIMB Securities. A supply disruption of 500,000 barrels of oil per day could result in a price increase of US$10 per barrel, based on historical events, the house noted.
Dialog Group Bhd (KL:DIALOG), in particular, is expected to benefit from rising oil prices due to its upstream assets that contributed 35% to its FY2024 core net profit, CIMB noted.
