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Stocks

Shares fall for 2nd week as China woes persist, oil plunges

KUALA LUMPUR (NewsRise) -- Malaysian shares ended lower for the second consecutive week, as a collapse in crude oil prices and escalating concerns of a China-led global slowdown continued to weigh on global risk appetite.

     The nation's benchmark FTSE Bursa Malaysia KLCI fell 0.30% Friday, ending at 1,628.55 points. The index has shed 1.7% this week and 3.8% so far this year.

     Banking majors CIMB Group Holdings and RHB Capital, Petronas Chemicals Group and SapuraKencana Petroleum were the biggest losers on the KLCI this week, while cigarette maker British American Tobacco Malaysia led gains.

     The ringgit slipped 0.15% to 4.3965 Friday. The currency declined 0.5% this week, extending its fall to 2.5% since the start of the year.

     Brent crude oil prices traded at 12-year lows, dropping below $30 a barrel. The benchmark Brent crude contract rose 2.4% Thursday, but came under renewed pressure Friday amid concerns of additional oil supply from Iran. Crude prices have fallen more than 10% so far this week and almost 20% year-to-date.

     Most other Asian indexes and currencies registered weekly declines.

     China's Shanghai Composite index and Hong Kong's Hang Seng index declined 3.51% and 1.5% Friday, extending weekly losses to 4.6% and 8.9%.  Japan's Nikkei 225 index and South Korea's Kospi slipped 0.54% and 1.12% today. The Nikkei index fell 3.1% this week, while the Kospi slid 2%.

     In Southeast Asia, Singapore's Strait Times index closed 0.62% lower Friday to extend its weekly decline to 4.4%. Indonesia's Jakarta Stock Exchange Composite and Philippine's PSE Composite rose 0.24% and 0.64% Friday, trimming their weekly fall to 0.5% and 1.9%. Thailand's SET index fell 1.25% in today's session, but rose 0.3% for the week.

     On the KLCI, 16 of the 30 constituents ended lower Friday, while overall declining issues outnumbered advancing ones 580 to 325.

     "We do not have a positive outlook on the KLCI for the year, as we reckon the two primary sectoral index constituents -- banking and plantation -- will continue to remain weak in 2016," said Pong Teng Siew, head  of research at Inter-Pacific Securities.

     The KLCI finance and plantation index fell 10% and 3.4% in 2015 and have declined 3.3% and 1.2% since the start of 2016.

     Plantation major Sime Darby fell 2.47% to 7.12 ringgit Friday, extending the week's losses to 5.1%.

     Foreign investors were net sellers on the KLCI for the sixth consecutive session Thursday, selling shares worth 135.7 million ringgit ($30.8 million), according to BIMB Securities. Overseas investors have withdrawn almost 1.1 billion ringgit from Malaysia markets since the start of the year.

     SapuraKencana Petroleum was the worst performing index stock this week, shedding 9.2%, as Malaysia's biggest oil and gas services company remains under pressure from falling crude oil prices, which are expected to remain weak until 2017 amid waning demand, dealers said. The stock declined 3.45% to 1.68 ringgit Friday. It has fallen nearly 17% in 2016 so far.

     CIMB Group Holdings and RHB Capital were among the worst performing banking stocks during the week, slipping 6.5% and 6.3%. The banking majors fell 0.74% to 4.01 ringgit and 0.76% to 5.21 ringgit in Friday trading.

     Inter-Pacific Securities' Pong expects lower credit growth in a slowing economy and increasing pressure on net interest margins to continue to weigh on banking stocks in 2016.

     Hong Leong Financial Group and AMMB Holdings slipped 2% and 1% in the week, falling 0.3% to 13.5 ringgit and 0.23% to 4.39 ringgit on Friday.

     Petronas Chemicals Group, one of the largest integrated chemical producers in Southeast Asia, declined 7.3% in the week to give up last week's near 4% advance. The stock, however, closed 0.29% higher at 7 ringgit Friday.

     Westports Holdings extended last week's over 3% slump, to decline 4.7% in the week. The logistics conglomerate ended unchanged at 3.79 ringgit today.

     British American Tobacco Malaysia rose 2.8% this week, partly recovering last week's 3.5% decline. The cigarette maker closed 0.64% lower at 55.64 ringgit Friday.

     Television services provider Astro Malaysia Holdings was the best performing index stock on Friday, rising 2.03% to 2.51 ringgit.

     Automaker UMW Holdings gained 1.11% to 7.29 ringgit Friday. It had declined more than 8.5% this year till Thursday.

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