Amid the outbreak of global pandemic COVID-19, KLSE Market is flooded with short term investments, deriving a surge in interest in penny stocks. Just in four trading days between May 12 to May 15, a total of 32.22 billion shares worth RM16.74 billion was traded. 40% of this trade was between retail investors with a view to make short term profit in the KLSE market.
The total net buying by retailers in the market stood to only RM 176.6 million as compared to last week where the shares of value RM 10.71 billion were transacted. There are certainly more trading activities by retail investors in short term stock picks as compared to institutional investors who invest in long term securities.
Domestically, Bank Negara reduced the policy rate by 50 bps, lowering the borrowing cost. This was done in order to reduce inflationary pressure. Due to this move the share prices of the bank were seen rising due to the relief that the cut in policy rate was much lower than anticipated.
Also the decision of the Central Bank to allow Malaysian Government Securities and investment issues to offset bank statutory reserve requirements was seen helpful and has increased liquidity in the market.
All these factors have affected the KLSE market which has seen heavy sell down of the shares. The investors who have been on the sideline, now believe it is the right time for some bargain hunting. But at this time one needs to selective before investing and follow stock tips and signals for a fruitful investment.
Here are some daily stock picks for KLSE market that you should consider before investing in 2020 –
#1. Dialog Group BHD
The oil and gas sector has seen a major decline in demand due to lockdown and oil price crash. The company will be a prime beneficiary given the low oil price environment should see a high demand for storage space.
#2. Serba Dinamik Holdings BHD
The company will remain at a beneficial end due to positive investors’ sentiments. The company will receive this benefit from higher maintenance demand in the middle east as production ramps up. Apart from the maintenance work the starting of the Pengerang Integrated Complex can add up to the process.
#3. Velesto Energy BHD
There has been a substantial downward revision in the revenue and Earnings Per Share of the company. Although the bidders are seeing a different story with a stock price of RM 0.17 reflecting a 22% rise in last week.
Market sentiments have declined substantially with substantial drop in revenue and a pretty serious decline in EPS.
Apart from this our researchers still recommend avoiding tourism-related stocks such as aviation and Genting stocks, despite a constant fall in share prices of these stocks. Likewise, investors would need to select potential stocks with solid fundamentals in order to make investment worth.
In this global pandemic, investors are constantly looking out for stocks with short term profit potential. However, you should consider various signals and tips before investing.