Source: Malaysia Today, Thursday, 06 March 2008
By Little Bird
When the PM Badawi announced the dissolution of Parliament on the 13th of February he also mentioned that among other things the KLSE was robust with the Composite Index (KLCI) at over 1400 points. This would be the first time that any Prime Minister would refer the Stock Market as a barometer to call for the elections.
But the KLCI has been going south since then. Here is some info about the KLCI from Feb 13 till today.
On Feb 12th 2008, one day before the dissolution of Parliament, the KLCI stood at 1,417.52 points.
On the day of the announcement of the dissolution of Parliament on Feb 13, the KLCI went up to 1,423.
Then, on Feb 21, the KLCI fell below 1,400 points to 1,394. By March 4th 2008, the KLCI retreated further south to 1,324. March 5th saw the KLCI dip below 1,300 to hit a five-month low of 1,285. The KLCI has dropped over 9% since the announcement of the dissolution of Parliament by Badawi.
Despite the KLCI hitting over 1,400 points many people were asking ‘Eh whose share went up ah?’ Because many shares just did not go up in price that much or not at all. Some folks said that money was being pumped in to push up the Index Stocks. There are 100 Index stocks. If these stocks move up or down, the KLCI will follow suit. Even among these Index stocks there are only about 20 heavyweight ones that really matter (Maybank, Telekoms etc). The Gomen fund managers can easily push up the KLCI by pumping money into these 20 counters.
And the smart foreign fund managers have tagged along for the ride. But along with the weak sentiment in bourses overseas, the market is also wary of the outcome of the General Election on the 8 th of March 2008. The foreign boys are withdrawing some of their money. Hence the KLCI is going down south.
The everyday man on the street is not going to get burnt. The Gomen fund managers may get their fingers toasted. That’s our money too.
But both Badawi and Nor Yakob are not talking about the KLCI anymore.