KUALA LUMPUR (March 3): With the FBM KLCI currently at overbought levels, investors ponder whether the FBM KLCI can reach the all-time high of 1,594.74 in July 2011.
On Friday, CIMB led the KLCI to a higher close, as the firmer blue chips galvanised market sentiment. The KLCI rose 10.33 points or 0.66% to 1,583.78.
A further upward trend could boost sentiment among smaller cap stocks, but this would also hinge on external factors from the eurozone and high oil prices which could stifle global growth.
On Wall Street, the S&P and Nasdaq notched their eighth week of gains out of the last nine, but momentum ran out on Friday as stocks ended the day lower in a thinly traded session.
Energy shares were the big losers in the broad decline, falling alongside crude oil prices, though other cyclical groups, including industrials and financials, also lost altitude.
Reuters said the Dow Jones industrial average dipped 2.73 points, or 0.02 percent, to 12,977.57 at the close. The Standard & Poor's 500 Index slipped 4.46 points, or 0.32 percent, to 1,369.63. The Nasdaq Composite Index shed 12.78 points, or 0.43 percent, to close at 2,976.19.
For the week, the Dow inched down 0.05 percent, while the S&P 500 rose 0.3 percent and the Nasdaq added 0.4 percent. On Tuesday, the Dow closed above 13,000 for the first time since May 2008, though it has subsequently struggled to maintain that level.
Affin Investment Bank head of retail research Dr Nazri Khan said on the technical front, the short term momentum might be overbought, but it was normal to expect the KLCI to stay at overbought level for an extended period of time.
“With the KLCI at seven months high, we see the bulls having the upper hand now with all oscillators pointing up accompanied by good trading volume (KLCI has rallied a respectable 62 points and 4% year-to-date with 1.6 billion shares average daily volume suggesting strong buyers underneath).
“The next FBMKLCI target should ultimately come in at July 2011 all-time-high of 1597 level. Short term supports meanwhile are seen at last week high and low near 1565 and 1550 level respectively,” he said in a note.
Meanwhile stocks to watch on Monday include EBWORX BHD [], UEM Land Bhd, CB INDUSTRIAL PRODUCT HOLDING [] Bhd (CBIP), KUALA LUMPUR KEPONG BHD [], ENVAIR HOLDING BHD [] and CyPARK RESOURCES BHD [].
Hitachi Ltd had on Friday launched a conditional voluntary general offer for eBworx Bhd with an indicative purchase price of 90 sen a share. Its pre-suspension price was 78.5 sen.
eBworx said Hitachi had proposed to acquire the shares by making a conditional voluntary general offer to all holders of the shares with a minimum level of acceptances of no less than 85% of the nominal value of the shares excluding the treasury shares held by the company.
UEM Land has targeted a 40% increase in net profit under its key performance indicators for 2012. It was reported the property developer was also targeting a 50% increase in revenue.
UEM Land managing director and CEO Datuk Wan Abdullah Wan Ibrahim was quoted as saying the optimism was underpinned by the various launches this year with a combined gross development value of RM4.5 billion.
He was also quoted saying that for 2012, UEM Land was targeting to achieve RM3 billion in property sales with new residential and commercial property launches.
Meanwhile, The Edge weekly said palm oil mills builder and equipment manufacturer CB Industrial Product Holding is quietly transforming itself into a medium-size palm oil player with the expansion of its Indonesian PLANTATION [] venture.
CBIP would also attract interest as its one-for-one bonus issue goes ex on Monday.
KL Kepong plans to build three refineries in Indonesia to tap higher margins after Jakarta lowered its processed edible oil export taxes, Reuters reported.
With 56% of the its total 248,498 ha land bank in Indonesia, KLK’s plantations director Roy Lim was quoted saying there was little choice but to build the refineries there.
Envair plans to undertake a private placement of up to 35.56 million new shares or 30% of its paid-up to raise RM9.78 million or 27.5 sen per share. It last traded price was 29.5 sen.
The shares would be placed out to its major shareholder Deepak Jaikishan, the directors Mohd Anuar Mohd Hanadzlah and Mohd Shukri Abdullah and independent third parties.
Cypark Resources Bhd has proposed a private placement of up to 15.52 million shares or 10% of the paid-up share capital, to raise up to RM27.48 million.
The indicative issue price was RM1.77 per placement share, which would be a discount of about 10% to the five-day volume weighted average market price of the shares up to and including the last practical date of RM1.9585.
Poultry-based DBE Gurney Bhd has proposed to place out 67.33 million shares or 10% of the current paid-up share capital to raise funds for working capital.
It said the proposed private placement will enable the group to raise fund for working capital requirements, improve the group’s cash flow position and also to provide continued support to the group’s existing business and future business expansion.
DBE Gurney said assuming the placement shares were issued at an indicative issue price of 10 sen per placement share based on the par value of the shares, the proposed private placement is expected to raise gross proceeds of up to RM6.73 million.
