KUALA LUMPUR: Stocks on Bursa Malaysia are likely to trend higher this week and for the FBM KLCI, a break above the 1,530 resistance level could see it charging towards 1,560.
Affin Investment Bank’s head of retail research Dr Nazri Khan said the upside would be renewed belief among investors that the US Federal Reserve was ready to support financial assets.
“We view the dovish statement from the US central bank, (which said interest rates would remain exceptionally low until at least late 2014) is a positive surprise for investors and hence open out a possibility of huge asset purchases to boost the global economy (with some economists already anticipating another round of QE3 during the next March-April meetings),” he said.
As for stocks on Bursa Malaysia, he believed investors would maintain their strong risk appetite, with commodities and emerging market currencies seeing strong demand.
His views were also supported by EPFR Global which provides fund flows and asset allocation data to financial institutions around the world.
EPFR said flows into EPFR global-tracked Emerging Markets Equity Funds hit a 42-week high during the week ended Jan 25, with retail investors committing the most money in over a year. Investors recovered their appetite for Asia’s story and factored in the monetary easing they now expect from the European Central Bank and the US Federal Reserve.
“Flows into Asia ex-Japan Equity Funds climbed to a 30-week high, year-to-date inflows for the diversified Global Emerging Markets (GEM) Equity Funds moved close to the US$6 billion (RM18.2 billion) mark and Latin America Equity Funds had their best week since the fourth quarter of 2010,” it said in a statement.
Glenealy Plantations (M) Bhd and Lingui Development Bhd could see some trading interest after its major shareholder Samling Strategic Corp Sdn Bhd (SCC) announced plans to take them private.
SCC offered RM7.50 a share for the plantation-based Glenealy shares, which was a premium of 95 sen or 14.5% above the pre-suspension price of RM6.55. It also offered RM1.63 per share for the timber-based Lingui shares, which was 27 sen or 19.8% above the pre-suspension price of RM1.36.
Golden Frontier Bhd’s main shareholder Frontier Equity Sdn Bhd, which owns 41.26%, has served a notice of conditional takeover offer on the company, offering RM1.50 a share for the remaining stake it does not own.
The RM1.50 offer price is a premium of 21.95% or 27 sen over the five-day volume weighted average price (VWAP) of the shares up to Jan 20. The offer price is 27.12% or 32 sen over the one-month VWAP of RM1.18. The pre-suspension price was RM1.21.
Malaysian Rating Corp Bhd (MARC) downgraded the rating of Olympia Industries Bhd’s outstanding RM49.73 million nominal value redeemable unsecured loan stocks (RULS) loan stocks to B+ from BB-.
However, MARC concurrently revised the rating outlook of these RULS to stable from negative on expectations that Olympia will manage timely the disposal of assets to meet its future debt obligations.
The Edge weekly reported that steel players were not benefiting from the recent Thai floods.
It said the optimism proved unfounded as demand failed to materialise due to excess capacity and delays in implementation of big projects.
Malayan Bulk Carriers Bhd was queried by Bursa Malaysia Securities Bhd over the rise in share price and high trading volume, which closed up 21 sen to RM2.65.
However, the company said it was not aware of any reasons or any corporate exercise that might have contributed to the unusual market activity.
Maybulk CEO Kuok Khoon Kuan disposed of 830,000 shares on Jan 26 and 27, reducing his direct stake to 0.13% or 1.268 million shares.
Luxembourg-registered Genesis Smaller Companies Sicav disposed of 4.6 million shares in Air Asia Bhd on Jan 26, reducing its stake to 146.029 million shares or 5.26%.
This article appeared in The Edge Financial Daily, January 30, 2012.
Affin Investment Bank’s head of retail research Dr Nazri Khan said the upside would be renewed belief among investors that the US Federal Reserve was ready to support financial assets.
“We view the dovish statement from the US central bank, (which said interest rates would remain exceptionally low until at least late 2014) is a positive surprise for investors and hence open out a possibility of huge asset purchases to boost the global economy (with some economists already anticipating another round of QE3 during the next March-April meetings),” he said.
As for stocks on Bursa Malaysia, he believed investors would maintain their strong risk appetite, with commodities and emerging market currencies seeing strong demand.
His views were also supported by EPFR Global which provides fund flows and asset allocation data to financial institutions around the world.
EPFR said flows into EPFR global-tracked Emerging Markets Equity Funds hit a 42-week high during the week ended Jan 25, with retail investors committing the most money in over a year. Investors recovered their appetite for Asia’s story and factored in the monetary easing they now expect from the European Central Bank and the US Federal Reserve.
“Flows into Asia ex-Japan Equity Funds climbed to a 30-week high, year-to-date inflows for the diversified Global Emerging Markets (GEM) Equity Funds moved close to the US$6 billion (RM18.2 billion) mark and Latin America Equity Funds had their best week since the fourth quarter of 2010,” it said in a statement.
Glenealy Plantations (M) Bhd and Lingui Development Bhd could see some trading interest after its major shareholder Samling Strategic Corp Sdn Bhd (SCC) announced plans to take them private.
SCC offered RM7.50 a share for the plantation-based Glenealy shares, which was a premium of 95 sen or 14.5% above the pre-suspension price of RM6.55. It also offered RM1.63 per share for the timber-based Lingui shares, which was 27 sen or 19.8% above the pre-suspension price of RM1.36.
Golden Frontier Bhd’s main shareholder Frontier Equity Sdn Bhd, which owns 41.26%, has served a notice of conditional takeover offer on the company, offering RM1.50 a share for the remaining stake it does not own.
The RM1.50 offer price is a premium of 21.95% or 27 sen over the five-day volume weighted average price (VWAP) of the shares up to Jan 20. The offer price is 27.12% or 32 sen over the one-month VWAP of RM1.18. The pre-suspension price was RM1.21.
Malaysian Rating Corp Bhd (MARC) downgraded the rating of Olympia Industries Bhd’s outstanding RM49.73 million nominal value redeemable unsecured loan stocks (RULS) loan stocks to B+ from BB-.
However, MARC concurrently revised the rating outlook of these RULS to stable from negative on expectations that Olympia will manage timely the disposal of assets to meet its future debt obligations.
The Edge weekly reported that steel players were not benefiting from the recent Thai floods.
It said the optimism proved unfounded as demand failed to materialise due to excess capacity and delays in implementation of big projects.
Malayan Bulk Carriers Bhd was queried by Bursa Malaysia Securities Bhd over the rise in share price and high trading volume, which closed up 21 sen to RM2.65.
However, the company said it was not aware of any reasons or any corporate exercise that might have contributed to the unusual market activity.
Maybulk CEO Kuok Khoon Kuan disposed of 830,000 shares on Jan 26 and 27, reducing his direct stake to 0.13% or 1.268 million shares.
Luxembourg-registered Genesis Smaller Companies Sicav disposed of 4.6 million shares in Air Asia Bhd on Jan 26, reducing its stake to 146.029 million shares or 5.26%.
This article appeared in The Edge Financial Daily, January 30, 2012.
