KUALA LUMPUR: After last week’s choppy seas, the FBM KLCI yesterday closed up 0.92% or 13.17 points to end at 1,444.72 points as the local market played catch up with regional markets and positive sentiment on Wall Street overnight.
The local index surged in early trade yesterday to hit an intra-day high of 1,458 points in the afternoon before closing lower at 1,444.72 points. Bursa Malaysia was closed on Monday due to a public holiday.
The FBM KLCI’s performance yesterday was largely driven by funds buying into Genting Bhd and selected banking stocks including CIMB Group Holdings Bhd and AMMB Holdings Bhd.
Genting yesterday surged 48 sen to RM10.50 with 10.35 million shares traded.
CIMB Group gained 31 sen to RM7.05 with 17.1 million shares traded while AMMB gained 28 sen to RM5.92 on a volume of 7.78 million shares. Both banking groups yesterday clocked in their steepest gain since late September.
On Bursa Malaysia, the top two gainers were consumer counters, British American Tobacco (M) Bhd (BAT) and Nestle (Malaysia) Bhd.
BAT yesterday gained 50 sen to RM45.90 while Nestle rose 50 sen to RM51.40.
Many analysts pointed out that the brief rally seen yesterday was a catch-up on positive sentiment seen across major regional bourses since Monday.
Regional markets in turn were riding on the good cheer on Wall Street from brighter US retail sales data over Thanksgiving last week, analysts said.
On Nov 28, the Dow Jones Industrial Average gained 2.59% to 11,523.01 points while the S&P 500 Index rose 2.92% to 1,192.55 points.
Hong Kong’s Hang Seng Index yesterday rose 1.21% to 18,256.2 points, the Shanghai Composite Index gained 1.23% to 2,412.39 points while Japan’s Nikkei 225 jumped 2.29% to 8,477.82 points.
Could the FBM KLCI’s performance yesterday foreshadow a year-end rally?
Analysts opined that it was still too early to predict if the local market could see a year-end rally as market sentiment was largely dependent on external economic conditions.
HwangDBS Investment Management Bhd head of equities Gan Eng Peng said that it was currently difficult to predict the market’s short-term direction given that markets are “in the state of delirium and no longer rational”.
“Markets are still driven by news and headlines rather than fundamentals. To be honest, how long this rally will last is anyone’s guess. We think it is just a spur of the moment,” Gan said in an email response.
Gan said markets could be pulled down once more in the event that there are no concrete plans to tackle the eurozone debt crisis during the next European summit on Dec 9 or further deadlock at the US Congressional Super Committee in resolving the US deficit issue.
Gan, however, expects to see some trading and profit-taking activity over the next few weeks as funds seek to “prop up” their portfolios and recover some of the losses made a few months earlier.
“About half of the smart money is sitting on the sidelines, while the other half is slowly flowing back to the market,” Gan remarked.
In a similar vein, UOB Kay Hian (Malaysia) head of research Vincent Khoo said that whether a year-end rally will materialise cannot be ascertained for another two to three weeks but funds could position themselves closer to the year’s end.
“A lot of it depends on what happens in Europe and the US. Right now it is a bit of a yo-yo situation. In Malaysia’s case, the catalyst (for a year-end rally) could be optimism for US economic recovery or a pre-election rally,” Khoo said.
Khoo added that although the FBM KLCI could see a slight uptrend towards the year’s end, it remained to be seen to what extent the index can catch up after falling from its recent peak.
Although the FBM KLCI closed higher at 1,444.72 points yesterday, it was still at a lower level than the recent one-month peak of 1,491.89 on Oct 31.
Yesterday’s closing level was also about 9.4% or 150.02 points lower than the year-to-date high of 1,594.74 on July 8.
This article appeared in The Edge Financial Daily, November 30, 2011.
The local index surged in early trade yesterday to hit an intra-day high of 1,458 points in the afternoon before closing lower at 1,444.72 points. Bursa Malaysia was closed on Monday due to a public holiday.
The FBM KLCI’s performance yesterday was largely driven by funds buying into Genting Bhd and selected banking stocks including CIMB Group Holdings Bhd and AMMB Holdings Bhd.
Genting yesterday surged 48 sen to RM10.50 with 10.35 million shares traded.
CIMB Group gained 31 sen to RM7.05 with 17.1 million shares traded while AMMB gained 28 sen to RM5.92 on a volume of 7.78 million shares. Both banking groups yesterday clocked in their steepest gain since late September.
On Bursa Malaysia, the top two gainers were consumer counters, British American Tobacco (M) Bhd (BAT) and Nestle (Malaysia) Bhd.
BAT yesterday gained 50 sen to RM45.90 while Nestle rose 50 sen to RM51.40.
Many analysts pointed out that the brief rally seen yesterday was a catch-up on positive sentiment seen across major regional bourses since Monday.
Regional markets in turn were riding on the good cheer on Wall Street from brighter US retail sales data over Thanksgiving last week, analysts said.
On Nov 28, the Dow Jones Industrial Average gained 2.59% to 11,523.01 points while the S&P 500 Index rose 2.92% to 1,192.55 points.
Hong Kong’s Hang Seng Index yesterday rose 1.21% to 18,256.2 points, the Shanghai Composite Index gained 1.23% to 2,412.39 points while Japan’s Nikkei 225 jumped 2.29% to 8,477.82 points.
Could the FBM KLCI’s performance yesterday foreshadow a year-end rally?
Analysts opined that it was still too early to predict if the local market could see a year-end rally as market sentiment was largely dependent on external economic conditions.
HwangDBS Investment Management Bhd head of equities Gan Eng Peng said that it was currently difficult to predict the market’s short-term direction given that markets are “in the state of delirium and no longer rational”.
“Markets are still driven by news and headlines rather than fundamentals. To be honest, how long this rally will last is anyone’s guess. We think it is just a spur of the moment,” Gan said in an email response.
Gan said markets could be pulled down once more in the event that there are no concrete plans to tackle the eurozone debt crisis during the next European summit on Dec 9 or further deadlock at the US Congressional Super Committee in resolving the US deficit issue.
Gan, however, expects to see some trading and profit-taking activity over the next few weeks as funds seek to “prop up” their portfolios and recover some of the losses made a few months earlier.
“About half of the smart money is sitting on the sidelines, while the other half is slowly flowing back to the market,” Gan remarked.
In a similar vein, UOB Kay Hian (Malaysia) head of research Vincent Khoo said that whether a year-end rally will materialise cannot be ascertained for another two to three weeks but funds could position themselves closer to the year’s end.
“A lot of it depends on what happens in Europe and the US. Right now it is a bit of a yo-yo situation. In Malaysia’s case, the catalyst (for a year-end rally) could be optimism for US economic recovery or a pre-election rally,” Khoo said.
Khoo added that although the FBM KLCI could see a slight uptrend towards the year’s end, it remained to be seen to what extent the index can catch up after falling from its recent peak.
Although the FBM KLCI closed higher at 1,444.72 points yesterday, it was still at a lower level than the recent one-month peak of 1,491.89 on Oct 31.
Yesterday’s closing level was also about 9.4% or 150.02 points lower than the year-to-date high of 1,594.74 on July 8.
This article appeared in The Edge Financial Daily, November 30, 2011.
