Stocks trade lower as country for ‘total’ lockdown

A man wearing a face mask to protect against Covid-19 walks past two Malaysian flags in the capital, Kuala Lumpur.

Faris Hadziq | SOPA pictures | LightRocket via Getty Images

Stocks in Malaysia fell on Monday as the government announced a nationwide “total lockdown” to contain the rapidly rising daily Covid-19 infections in the country.

The benchmark index FTSE Bursa Malaysia KLCI fell around 1.5% at the time of opening before closing the session 0.7% lower – trailing many markets in the Asia Pacific region.

Malaysia is struggling to control an increase in Covid infections. Last week, the country reported five consecutive days of record spikes in coronavirus cases, bringing cumulative infections to more than 565,500 cases, with 2,729 deaths on Sunday, health ministry data showed.

Prime Minister Muhyiddin Yassin announced on Friday after the market closed that the country would enter into a two-week lockdown from Tuesday.

During the period, individuals are generally only allowed to leave their homes to purchase essential items or to get medical services. For companies, those offering essential services remain open, while certain segments of manufacturing can operate at reduced capacity.

Brian Tan, an economist at Barclays Bank in Singapore, estimated the measures will cost the Malaysian economy between 0.5 and 1 percentage point every two weeks.

Tan wrote in a Monday note that he has cut Malaysia’s growth forecast for 2021 from 6.5% to 5.5% – below the central bank’s projection range of 6% to 7.5%.

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