KUALA LUMPUR: The local stock market bellweather FBM KLCI rose for a fifth day yesterday and with tomorrow being the final day of trading for 2011, investors are expecting the upward momentum to continue, ending the year on positive note.
Closing 3.2 points higher at 1,504.11 yesterday, the KLCI has risen nearly 2.7% over the last five days, and is 14.08 points or 0.94% shy of its 2010 year-end closing of 1,518.19 points. However, the KLCI traded close to a year-low volume with around 50 million shares done yesterday and Tuesday, due to the holiday season.
Most of the trading activity yesterday was seen during the last two hours of the second trading session when the KLCI breached its Tuesday close of 1,500.91.
Although activity was higher across the bourse compared with Tuesday, it is believed the KLCI’s uptrend was mainly due to window dressing by institutional fund managers.
Yesterday, a total of 1.27 billion shares valued at RM904.26 million changed hands, resulting in 386 rising stocks versus 314 declining entities. On Tuesday, 993.78 million shares valued at RM743.88 million were traded.
“What we feel is that there is a strong incentive to close the year on a high note above 1,500 points,” TA Investment Management Bhd chief investment officer Choo Swee Kee told The Edge Financial Daily.
Choo said many of the local funds may try to hold the KLCI above 1,500 as it serves as a psychological level to start the new year on a positive note.
He said the Malaysian market would also likely end in positive territory as it has been generally well supported for the whole of this year compared with developed markets such as in Singapore and Hong Kong, which have fallen by about 15% to 20% over the year.
Choo said the support comes from a “first and foremost” view that Malaysia is a defensive market, with many players in the Malaysian market being domestic funds.
He said the government’s Economic Transformation Programme (ETP) is also another reason to support the market. He said there is expectation for the markets to hold up until the general election, widely expected to be held next year.
Chris Eng, who heads OSK Research, shared this view. “At the very least I think there is a strong chance for it to close above 1,500, being so close to it right now.”
Asked about window dressing activity by fund managers towards year-end, Eng said it could happen with government and non-government funds, which is one of the reasons he sees the KLCI potentially closing the year on a high note.
The month of December has also been auspicious for the KLCI. According to a report by MIDF Investment Bank, there were only two years (in 2000 and 2004) since 1995 in which the KLCI ended December lower than it started.
The report said in the last six years, the KLCI has ended the month in the positive gain territory, ranging from 0.4% to 3.4%, while its 16-year average gain in December since 1995 was 3.6%.
Close to the peak of the 2008/09 global financial crisis in December 2008, the KLCI managed to gain 3.9% during the month. It started with 848.43 points on Dec 1, 2008 and ended at 881.63 points on Dec 31, 2008.
With a year-to-date (YTD) decline of 1.9%, the KLCI has been among the best performing indices in the region, outperforming markets such as in India, China, Taiwan, and Hong Kong, all of which have fallen between 19% and 24%.
The other top performing indices were the Philippine PSEi Index rising 3.23%, the Jakarta Composite Index (1.77%), followed by Thailand’s SET Index, down by 0.74%.
Among the region’s worst performing indices this year were Bombay’s Sensex 30, down 23.4% YTD, followed by the Shanghai Composite Index (-22.72%), Taiwan’s Taiex (-21.35%), Hong Kong’s Hang Seng Index (-19.61%), Japan’s Nikkei 225 (-17.65%), Singapore’s Straits Times Index (-16.42%), Australia’s ASX 200 (-13.83%), and South Korea’s Kospi (-11.01%).
Except for the Shanghai Composite Index, which was up 0.18% to close at 2,170.01, all the indices mentioned above were in the red yesterday.
Among the top losers were Bombay’s Sensex 30, ending the day down 1.03% to 15,710.02, and Australia’s ASX 200, closing 1.25% lower to 4,088.80.
Taiwan’s Taiex fell by 0.4% to 7056.67, while Japan’s Nikkei 225 declined by 0.2% to 8423.62 and Singapore’s Straits Times Index was down 0.28% to 2666.25.
The Jakarta Composite Index, ended 0.53% down to 3,769.21, while Thailand’s SET Index closed 0.32% lower at 1,025.12.
This article appeared in The Edge Financial Daily, December 29, 2011.
Closing 3.2 points higher at 1,504.11 yesterday, the KLCI has risen nearly 2.7% over the last five days, and is 14.08 points or 0.94% shy of its 2010 year-end closing of 1,518.19 points. However, the KLCI traded close to a year-low volume with around 50 million shares done yesterday and Tuesday, due to the holiday season.
Most of the trading activity yesterday was seen during the last two hours of the second trading session when the KLCI breached its Tuesday close of 1,500.91.
Although activity was higher across the bourse compared with Tuesday, it is believed the KLCI’s uptrend was mainly due to window dressing by institutional fund managers.
Yesterday, a total of 1.27 billion shares valued at RM904.26 million changed hands, resulting in 386 rising stocks versus 314 declining entities. On Tuesday, 993.78 million shares valued at RM743.88 million were traded.
“What we feel is that there is a strong incentive to close the year on a high note above 1,500 points,” TA Investment Management Bhd chief investment officer Choo Swee Kee told The Edge Financial Daily.
Choo said many of the local funds may try to hold the KLCI above 1,500 as it serves as a psychological level to start the new year on a positive note.
He said the Malaysian market would also likely end in positive territory as it has been generally well supported for the whole of this year compared with developed markets such as in Singapore and Hong Kong, which have fallen by about 15% to 20% over the year.
Choo said the support comes from a “first and foremost” view that Malaysia is a defensive market, with many players in the Malaysian market being domestic funds.
He said the government’s Economic Transformation Programme (ETP) is also another reason to support the market. He said there is expectation for the markets to hold up until the general election, widely expected to be held next year.
Chris Eng, who heads OSK Research, shared this view. “At the very least I think there is a strong chance for it to close above 1,500, being so close to it right now.”
Asked about window dressing activity by fund managers towards year-end, Eng said it could happen with government and non-government funds, which is one of the reasons he sees the KLCI potentially closing the year on a high note.
The month of December has also been auspicious for the KLCI. According to a report by MIDF Investment Bank, there were only two years (in 2000 and 2004) since 1995 in which the KLCI ended December lower than it started.
The report said in the last six years, the KLCI has ended the month in the positive gain territory, ranging from 0.4% to 3.4%, while its 16-year average gain in December since 1995 was 3.6%.
Close to the peak of the 2008/09 global financial crisis in December 2008, the KLCI managed to gain 3.9% during the month. It started with 848.43 points on Dec 1, 2008 and ended at 881.63 points on Dec 31, 2008.
With a year-to-date (YTD) decline of 1.9%, the KLCI has been among the best performing indices in the region, outperforming markets such as in India, China, Taiwan, and Hong Kong, all of which have fallen between 19% and 24%.
The other top performing indices were the Philippine PSEi Index rising 3.23%, the Jakarta Composite Index (1.77%), followed by Thailand’s SET Index, down by 0.74%.
Among the region’s worst performing indices this year were Bombay’s Sensex 30, down 23.4% YTD, followed by the Shanghai Composite Index (-22.72%), Taiwan’s Taiex (-21.35%), Hong Kong’s Hang Seng Index (-19.61%), Japan’s Nikkei 225 (-17.65%), Singapore’s Straits Times Index (-16.42%), Australia’s ASX 200 (-13.83%), and South Korea’s Kospi (-11.01%).
Except for the Shanghai Composite Index, which was up 0.18% to close at 2,170.01, all the indices mentioned above were in the red yesterday.
Among the top losers were Bombay’s Sensex 30, ending the day down 1.03% to 15,710.02, and Australia’s ASX 200, closing 1.25% lower to 4,088.80.
Taiwan’s Taiex fell by 0.4% to 7056.67, while Japan’s Nikkei 225 declined by 0.2% to 8423.62 and Singapore’s Straits Times Index was down 0.28% to 2666.25.
The Jakarta Composite Index, ended 0.53% down to 3,769.21, while Thailand’s SET Index closed 0.32% lower at 1,025.12.
This article appeared in The Edge Financial Daily, December 29, 2011.
