Thomson Financial News
07.04.08, 12:52 AM ET
KUALA LUMPUR (Thomson Financial) - Malaysian shares were sharply lower in midmorning trade on Friday as nervous investors unloaded shares after a one-day suspension on Thursday due to a technical glitch, while political tensions also mounted.
Recent developments on the political front have spooked investors after Malaysia's Deputy Prime Minister Najib Razak was linked to the murder of Mongolian model Altantuya Shaariibuu following a private investigator alleging he had a relationship with her.
Najib has continually denied that he either knew or met the dead model.
'The Najib thing is a real bomb hitting investor sentiment,'' said Pong Teng Siew, head of research at Jupiter Securities.
'The one-day suspension yesterday together with the latest political developments have sparked a bout of concentrated selling -- basically you have two days' worth of selling squeezed into one, hence the sharp drop today.''
At 11:15 a.m. (0315 GMT), the Kuala Lumpur Composite Index (KLCI) had fallen 28.43 points or 2.5 percent to 1,125.27.
The FTSE Bursa Malaysia 30-large cap index had dropped 174.34 points or 2.3 percent to 7,271.09, while the FTSE Bursa Malaysia second board index had lost 79.20 points or 1.5 percent to 5,312.89.
Decliners overwhelmed advancers 547 to 55, with 110 stocks unchanged and 616 untraded.
Trading volume stood at 210 million shares valued at 523 million ringgit.
Government-linked stocks and blue chips led the falls. State-linked construction group MRCB tumbled 4.4 percent to 0.975 ringgit while cellular operator TM International (TMI) dived 4.3 percent to 5.60 ringgit.
Plantation giant Sime Darby, the largest listed palm oil company in the world, lost 1.1 percent to 8.85 ringgit and IOI Corp, the second largest plantation stock on the local bourse, was down 2.1 percent at 6.90 ringgit.
Among major banking stocks, Bumiputra-Commerce Holdings fell 3.3 percent to 7.30 ringgit while Maybank fell 2.1 percent to 6.90 ringgit.
Bumiputra-Commerce Holdings controls CIMB Bank, the second largest bank in Malaysia, which is headed by Nazir Razak, the younger brother of Najib Razak.