Malaysian stocks weighed down by pre-election sentiment

KUALA LUMPUR (April 27) : Malaysian stocks traded in negative territory on Friday morning as domestic pre-election sentiment gains an upper hand in dictating the direction of the FBM KLCI.

The local market may take the cue from domestic concerns ahead of the coming general election as investors assess the impact of the much-anticipated Bersih 3.0 rally on Saturday. Analysts said while US equities registered a stronger close in overnight trade, Asian stock markets could trade in an opposite direction on Friday.

“This is because sentiment will likely be affected by the negative vibes arising from S&P’s downgrade of Spain’s sovereign credit rating yesterday.

“Reflecting investors’ adverse reaction, the DJIA June futures contract tumbled this morning to hover at a 91-point discount to the spot rate,” HwangDBS Vickers Research Sdn Bhd wrote in a note.

At 9.59am, the FBM KLCI fell 9.28 points to 1,570.41. Across the exchange, some 455 million shares worth RM195 million were traded, leading to 163 gainers versus 208 decliners.

Top gainers NCB HOLDINGS BHD [] was up 45 sen to RM4.35 while PARKSON HOLDINGS BHD [] gained seven sen to RM5.29.

Among decliners, BRITISH AMERICAN TOBACCO (M) [] Bhd lost 76 sen to RM54.74, while Bumi Armada Bhd fell 18 sen to RM4.04.

Among actively-traded stocks, Ariantec Global Bhd gained two sen to RM25.5 sen with some 222 million shares done.

Across Asia, Japan’s Nikkei 225 rose 0.15% to 9,575.82, Australia’s S&P/ASX 200 climbed 0.08% to 4,378.8, while South Korea’s Kospi was up 0.78% to 1,979.43.



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KLCI gains on US, Europe updates

KUALA LUMPUR (April 25) : Malaysians stocks rose in tandem with Asian peers following a stronger close across US markets in overnight trade. Global markets have responded positively to improving US corporate earnings and housing sector updates, apart from firm demand for European government bonds.

Analysts said investors will watch for clues of further quantitative easing (QE) by US policymakers to sustain the world’s largest economy. Signs of a further QE may spur global equities while an opposite indication could result in profit taking, they said.

“Selling pressures on Asian equities may abate today after Wall Street’s performance last night,” HwangDBS Vickers Research Sdn Bhd wrote in a note.

At 9.59am, the FBM KLCI added 1.13 points to 1,583.41. Across the exchange, some 372 million shares worth RM188 million were traded, leading to 222 gainers versus 138 decliners.

Top gainers UMW HOLDINGS BHD [] rose 18 sen to RM7.83, while Panasonic Manufacturing Malaysia Bhd was up 16 sen to RM22.30.

Among decliners, UMS HOLDINGS BHD [] fell 20 sen to RM1.60 while PPB GROUP BHD [] was down 12 sen to RM16.66.

Among actively-traded stocks, RAMUNIA HOLDINGS BHD [] added one sen to 41 sen with some 15 million shares done.

Across Asia, Japan’s Nikkei 225 rose 1% to 9,562.62 points while South Korea’s Kospi was up 0.34% to 1,970.11. The Australian exchange is closed for a public holiday.



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Malaysian stocks ease on global weakness

KUALA LUMPUR (April 20) : Malaysians stocks fell on Friday morning in tandem with regional peers following a weaker overnight close across US markets. Global markets had reacted negatively to less-optimistic employment updates in the US, and rising yields for Spain government bonds.

Analysts said external factors could have the upper hand in dictating the FBM KLCI, prompting the anticipation of a further decline in the 30-stock benchmark.

“External headwinds will probably persist to push down our Malaysian bourse today,” HwangDBS Vickers Research Sdn Bhd wrote in note.

At 10am, the FBM KLCI fell 2.52 points to 1,594.1. Across the exchange, some 257 million shares worth RM148 million were traded, leading to 163 gainers versus 167 decliners.

Top gainers KUALA LUMPUR KEPONG BHD [] added 36 sen to RM24.16, while JAYA TIASA HOLDINGS BHD [] was up 32 sen to RM10.

Among decliners, GENTING BHD [] fell 12 sen to RM10.80 while HONG LEONG INDUSTRIES BHD [] was down 10 sen to RM4.12.

Most active was Ariantec Global Bhd which rose 1.5 sen to 19 sen with some 42 million shares done.

Among Asian bourses, Japan’s Nikkei 225 fell 0.44% to 9,545.96 points, South Korea’s Kospi was down 1.25% to 1,974.93, while Australia’s S&P/ ASX 200 declined 0.17% to 4,355.4.



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KLCI gains on European debt sale and China outlook

KUALA LUMPUR (April 13) : Malaysian shares gained on Friday morning in tandem with Asian markets following overnight gains across US equity markets.

Global markets had found support from updates that Italian government bonds had seen better than expected demand, apart from the anticipation of China’s first quarter gross domestic product numbers on Friday. Analysts said overnight gains across US stock markets is expected lend to support to Asian equities.

“Back home, the benchmark FBM KLCI will probably show an extended upward bias following a cumulative two-day gain of 10 points. The immediate resistance barrier for the bellwether is currently seen at 1,610,” HwangDBS Vickers Research Sdn Bhd wrote in a note.

At 10am, the FBM KLCI added 2.12 points to 1,603.39. Across the exchange, some 300 million shares worth RM145 million were traded, leading to 262 gainers versus 122 decliners.

Top gainers JAYA TIASA HOLDINGS BHD [] added three sen to RM9.29 while AMWAY (M) HOLDINGS BHD [] was up 24 sen to RM10.

Decliners SARAWAK OIL PALMS BHD [] fell 27 sen to RM6.61 while TRADEWINDS (M) BHD [] was down 10 sen to RM10.10

Most active was INGENUITY SOLUTIONS BHD [] which added one sen to 10 sen with some 73 million shares done.

Among Asian bourses, Japan’s Nikkei 225 rose 1.64% to 9,680.85 points while Australia’s S&P/ ASX 200 added 1.03% to 4,324.6. South Korea’s Kospi was up 1.2% to 2,010.49.



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KLCI down on weaker global economic data

KUALA LUMPUR (April 9) : Malaysian stocks fell on Monday morning in tandem with Asian market as less-optimistic economic data from the US, and anticipation of more updates from China weakened sentiment.

Analyst said the FBM KLCI is exhibiting weaker technical dynamics, despite gains last week. This could point to a decline in the index this week, they said.

“A market pullback may be in the horizon, with the FBM KLCI possibly making its way towards the first two support levels of 1,580 and 1,555, respectively, “ HwangDBS Vickers Research Sdn Bhd wrote in a note.

At 10.01am, the FBM KLCI fell 7.07 points to 1,591.8. Across the exchange, some 268 million shares worth RM148 million were traded, leading to 115 gainers versus 235 decliners.

Top gainers DUTCH LADY MILK INDUSTRIES BHD [] added 68 sen to RM36.48 while newly-listed EITA Resources Bhd rose 11.5 sen to RM87.5 sen.

Decliners BRITISH AMERICAN TOBACCO (M) [] Bhd fell 74 sen to RM54.72 while KUALA LUMPUR KEPONG BHD [] lost 28 sen to RM24.36.

Most active was Naim Indah Corp Bhd which declined two sen to 55 sen with some 63 million shares done

Among Asian equity benchmarks, Japan’s Nikkei 225 fell 1.51% to 9,541.71 points while South Korea’s Kospi declined 1.45% to 1,999.59.

The Hong Kong and Australian bourses are closed on Monday for the Good Friday and Easter holiday season.



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Stocks to Watch Xian Leng, ManagePay, AMMB

KUALA LUMPUR (April 4): The Malaysian stock market could see further profit taking on Thursday as investors weigh the impact of global economic updates against positive pre-election sentiment in Malaysia.

Crucial global highlights include US policymakers indication that they may not implement further quantitative easing to spur the world's largest economy. The updates had resulted in losses across Asian markets on Wednesday.

Malaysia's FBM KLCI erased earlier gains to finish 7.36 points or 0.46% lower at 1,599.27 points on Wednesday. In the US, the S&P 500 futures declined 10.5 points, while Dow Jones Industrial Average futures fell 100 points, a possible indication that US stocks may encounter another sell off.

Stocks to watch on Thursday include XIAN LENG HOLDINGS BHD [], APM AUTOMOTIVE HOLDINGS BHD [], ManagePay Systems Bhd, PHARMANIAGA BHD [], and AMMB HOLDINGS BHD [].

Trading of Xian Leng shares had been suspended since 12.16pm on Wednesday. In a statement to the exchange, the firm — which undertakes commercial breeding of ornamental fish — said it requested for the trading suspension pending the release of the findings of a special audit on the company's financials by PricewaterhouseCoopers.

HwangDBS Vickers Research Sdn Bhd has upgraded shares of APM, an automotive parts manufacturer, from "hold" to "buy", and raised its fair value for the stock from RM4.60 to RM5.60.

ManagePay was among the most-actively traded stock on Wednesday, when it rose as much as 27% or 5.5 sen to 26 sen, following updates on its strategic collaboration with Visa Worldwide Pte Ltd.

Pharmaniaga managing director Datuk Farshila Emran said the firm plans to double revenue contribution from the private sector from 3% to some 6% in current financial year ending Dec 31, 2012.

AMMB said its 51%-owned general insurance subsidiary AmG Insurance Bhd has received the government's consent to acquire KURNIA ASIA BHD [] 100% stake in Kurnia Insurans (Malaysia) Bhd.



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KLCI down 3 pts on Wed mid-morning

KUALA LUMPUR (April 4) : Malaysian stocks gave up earlier gains to slip into the red at mid-morning on Wednesday against a weaker backdrop across Asian equity indices.

This follows a weaker overnight close across US markets after policymakers indicated that they may not implement further quantitative easing to spur the world’s largest economy. Analysts said a weaker overnight close at US markets could dictate sentiment across Malaysian stocks on Wednesday.

“Still, we reckon the benchmark index (FBM KLCI) is expected to show resilience as investors may be tempted to buy on dips following the new record levels set by our local bourse this week,” HwangDBS Vickers Research Sdn Bhd wrote in a note.

At 10am, the 30-stock FBM KLCI fell 3.26 points to 1,603.37. Some 259 million shares worth RM111 million changed hands, leading to 142 gainers against 176 decliners while 256 entities were unchanged.

Top gainer BRITISH AMERICAN TOBACCO (M) [] Bhd rose 32 sen to RM56.54 followed by United PLANTATION []s Bhd which added 10 sen to RM25.

Decliners PPB GROUP BHD [] fell 12 sen to RM16.58 while TRIPLC BHD [] was down 7.5 sen to 43 sen.

Among actively traded stocks, Ariantec Global Bhd and METRONIC GLOBAL BHD [] were unchanged at 10.5 sen and 16 sen respectively with some 20 million shares done.

Across Asia, Japan’s Nikkei 225 fell 0.44% to10,005.8 points, Australia’s S&P / ASX 200 declined 0.43% to 4,318.6 while Taiwan’s Taiex was down 1.3% to 7,760.85

Stock markets in Hong Kong and China are closed on Wednesday. Note that markets in Europe and the US will be closed on Friday for the Easter holiday.



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HDBSVR: KLCI may struggle to tread above 1,580

KUALA LUMPUR (March 30): HwangDBS Vickers Research (HDBSVR) said despite an absence of positive developments, key US equity indices staged a late rebound on Thursday night.

On Wall Street, the key US indices managed to recover from intra-day losses of 0.7%-1.1% before finishing mixed (with changes of between -0.3% and +0.1%) at the closing bell.

“And following yesterday’s resilient performance, which saw the FBM KLCI ending in the positive territory when most regional peers were in the red, our Malaysian bourse will likely experience listless trading today,” it said.

HDBSVR said on the chart, the benchmark index may struggle to tread just above the immediate support line of 1,580 ahead.

Among the counters that could see added action include: (a) Maybank, after its president said the banking group’s net interest margin is expected to contract by 10 basis points this year due to competitive pressures; (b) Crest Builder, which has won a bid to undertake a joint development of a parcel of prime commercial land located at Dang Wangi LRT station with an estimated gross development value of RM220m; and (c) Cypark, following the signing of an MOU on cooperation in the field of waste management and renewable energy in Myanmar.



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HWDBSVR sees KLCI slipping below 1,580

KUALA LUMPUR (March 29): Hwang DBS Vickers Research said there is a possibility that the key FBM KLCI will slip below its immediate support line of 1,580 on Thursday.

In its market outlook on Thursday, it said if the KLCI falls below the 1,580, the index may be on its way to test the next support level of 1,555 in the near term.

This comes as Wall Street lost momentum overnight. Major U.S. stock indices were down 0.5% each amid disappointing economic data and falling crude oil prices.

Hoping to buck the weak market sentiment on our local bourse are two counters: (a) Gamuda after announcing stronger-than-expected quarterly profit yesterday evening; and (b) Bintai Kinden, as it would be involved (via a joint venture arrangement) in a electrical services and control systems job in Singapore’s MRT project valued at S$166 million.

Separately, two ACE Market companies will resume trading: (a) Key West Global, following its plan to venture into the oil & gas industry in Indonesia via the acquisition of convertible bonds for US$52.5m; and (b) Nextnation, which has proposed to acquire land in Cyberjaya for RM18.5 million, a bonus issue of one warrant for every 10 existing shares and a private placement exercise.



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HDBSVR sees profit-taking pressure on Bursa Malaysia

KUALA LUMPUR (March 28): Hwang DBS Vickers Research said on Wednesday the presence of profit-taking pressures on Bursa Malaysia is expected to push the FBM KLCI lower in the near term.

“On the chart, the benchmark index may be on its way to test the immediate support level of 1,580,” it said.

Overnight on Wall Street, the key US indices, which hovered near their four-year highs, saw mild corrections of between 0.1% and 0.3% at the closing bell.

HDBSVR said it expected the spillover effects to be felt around the region on Wednesday.

The research house said stocks that may pull back include Cahya Mata Sarawak following the termination of its agreement with Rio Tinto Aluminium to build an aluminium smelter plant in Sarawak.

Also in focus could be Supercomnet, after announcing that Mohd Nazifuddin would not be pursuing the option to acquire an 18.7% stake in the company.

However, TDM was expected to see upside after it proposed a tax-exempt dividend per share of 18.5 sen, translating to a net yield of 3.9%.



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HDBSVR sees market staging a rebound

KUALA LUMPUR (March 27): Hwang DBS Vickers Research said a robust overnight performance on Wall Street could give a fillip to Asian equities on Tuesday.

It said that major US stockindices jumped between 1.2% and 1.8% after the Federal Reserve chairman said accommodative monetary measures are still needed to stir the economy.

“Back home, the benchmark FBM KLCI is expected to pull away from the immediate support level of 1,580, possibly climbing towards the psychological barrier of 1,600 ahead,” it said.

HDBSVR said among the counters that may ride on the buoyant market sentiment include: (a) IOI Corporation, following a news report on the prospect of the PLANTATION [] giant making a huge paper gain of RM696 million arising from the impending listing of its Indonesian-based associate company in Singapore; (b) CBIP, after clinching a RM45 million contract to build a palm oil refinery plant; and (c) MSC, which has agreed to pay a higher royalty to the Perak state government on its sales of tin-in-concentrates in exchange for an extension in the mining lease period for its tin mine operation in the state.



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HDBSVR: FBM KLCI remains in vulnerable position

KUALA LUMPUR (March 26): Hwang DBS Vickers Research said although Wall Street was up slightly last Friday with its key equity indices rising between 0.2% and 0.3% at the closing bell, it expects limited spillover effects on Bursa Malaysia on Monday.

“Technically speaking, the FBM KLCI remains in a vulnerable position. Facing profit-taking pressures at the moment, the benchmark index could slip below its immediate support level of 1,580 ahead,” it said.

HDBSVR said against the slow market backdrop, following news reports in a business weekly, there could share price actions in: (a) Wah Seong, which is believed to have clinched a pipe-coating contract in Turkmenistan; (b) Deleum, as it may partner Petronas Carigali to form a global patent for a product that could increase oil extraction rates significantly; and (c) D’nonce TECHNOLOGY [], given that one of its subsidiary is in advanced talks to supply halal food products to Kazakhstan.



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HDBSVR: Malaysian market could come under selling pressure

KUALA LUMPUR (March 23): Hwang DBS Vickers Research (HDBSVR) said with Wall Street showing signs of weakness, investors could be tempted to take profit across Asia on Friday.

It said that key US equity indices were down between 0.4% and 0.7% last night following a weaker-than-expected manufacturing growth data in China.

“Our Malaysian bourse will probably come under selling pressures too. Technically speaking, the benchmark FBM KLCI will likely lose ground to dip below the resistance-turned-support level of 1,580 ahead,” said the research house.

HDBSVR said stocks that may be hit on Friday include Metronic Global and Ariantec Global, amid one press report saying that proprietary day traders have been temporarily barred by some stock broking firms from trading in these two counters.

Hoping to get a lift is Lipo Corporation after its major shareholder Kobay TECHNOLOGY [] has proposed to undertake a selective capital reduction and repayment exercise involving a cash offer price of RM1.25 per share.

Separately, Malaysian AE Models has been awarded a sub-contract job worth RM62m at the new low cost carrier terminal in KLIA.



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HDBSVR sees KLCI struggling after crossing 1,580

KUALA LUMPUR (March 22): Hwang DBS Vickers Research said the FBM KLCI, after crossing slightly above the resistance hurdle of 1,580 on Wednesday, could struggle to maintain its position ahead.

It said on Thursday that from a technical perspective, the key market barometer is expected to show a downward bias in the near term.

“This follows a lackluster overnight performance on Wall Street. Major U.S. equity bellwethers ended between -0.3% and flat in the absence of fresh catalysts last night,” it said.

HDBSVR said hoping to catch investors’ attention on the local bourse on Thursday are stocks like: (a) Texchem Resources, after disposing of a 70% stake in two subsidiaries that are involved in the business of manufacturing and trading of insecticide products for RM129 million; (b) Bumi Armada, which has signed a contract worth RM115 million to provide oil & gas platform supply vessel; and (c) Mitrajaya, following the acceptance of letters of award for two CONSTRUCTION [] jobs totaling RM103 million.



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HDBSVR: Malaysian equities may face pressure

KUALA LUMPUR: Hwang DBS Vickers Research said the profit-taking activities on Wall Street overnight may put the Malaysian bourse under pressures with the benchmark FBM KLCI likely to back off from its immediate resistance barrier of 1,580 ahead.

In its market outlook on Wednesday, HDBSVR said in terms of news flows, of probable interest is an insight into Bank Negara Malaysia’s projections on GDP growth rate and inflation, which will be revealed in the central bank’s 2011 annual report due for release this evening.

On the corporate front, there could be share price actions in the following counters: (a) KL Kepong, after disposing of its retailing business of personal care products for RM465 million; (b) Fajarbaru, which has received a letter of award for a CONSTRUCTION [] job worth RM73 million; and (c) TA Enterprise, as its latest financial results came in below par.

Berjaya Sports Toto is scheduled to announce its earnings report card later Wednesday.



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Stocks to watch: Fajarbaru, KLK, CBIP, Focus

KUALA LUMPUR (March 21): Malaysian equities could be subject to profit taking on Wednesday against a lack of domestic catalysts to drive the market.

Analysts said the strength of the FBM KLCI may be curbed as institutional and retail investors lock in their profits ahead of the country’s impending general election, possibly in May or June this year.

On the global backdrop, the spotlight will be on updates from US and China, sentiments from which are crucial drivers for Asian stock markets, they said.

There is a “lack of strong catalysts” to spur the FBM KLCI higher, Hong Leong Investment Bank Research had said in a market outlook.

The FBM KLCI rose 4.02 points or 0.26% to close at 1,577.62 on Tuesday.

Stocks to watch on Wednesday include Fajarbaru Builder Group Bhd, KUALA LUMPUR KEPONG BHD [] (KLK), CB INDUSTRIAL PRODUCT HOLDING [] Bhd (CBIP) and FOCUS DYNAMICS TECHNOLOGIES [] Bhd.

Other companies which would see trading interest are MALAYAN BANKING BHD [] (Maybank), MMC Corp Bhd, GAMUDA BHD [] and CypARK RESOURCES BHD [].

Fajarbaru secured a RM72.92 million contract from Messrs Shaw Plaza Sdn. Bhd to tear down and rebuild the Shaw Parade complex in Kuala Lumpur.

Kuala Lumpur Kepong Bhd (KLK) is exiting its personal care products under the brand name “Crabtree & Evelyn” with the proposed disposal of CE Holdings Ltd for US$155 million (RM465 million).

“The proposed disposal is expected to bring in a gain on disposal of approximately 11.5 sen per share for the financial year ending Sept 30, 2012,” it said.

In a separate statement, KLK said it was expanding its oil palm PLANTATION [] area in Indonesia with the acquisition of PT. Global Primatama Mandiri (PT GM), which has the rights for 7,400 ha of land in, Kalimantan for plantations.

KLK said on Tuesday its subsidiary KL-Kepong Plantation Holdings Sdn Bhd (KLKPH) had entered into two agreements to acquire 90% of PT GM for RM3.60 million.

HwangDBS Vickers Research Sdn Bhd has raised its target price for CBIP, a manufacturer of palm oil mills, by 23% from RM2.43 to RM3 while maintaining its Buy call for the stock.

This takes into account the stock’s attractive valuations at a forward price to earnings ratio of seven times, HDBSVR said. CBIP was up one sen to RM2.45.

Focus Dynamics, in its response to the query, said it is not aware of any factors contributing to the unusual trading patterns of its shares except for a news report speculating on Datuk Raymond Chan Boon Siew’s proposed acquisition of a 25% stake in the energy-efficient electrical control products manufacturer.

Focus Dynamics said its directors, after deliberating on the news report, have informed that Chan is not a placee in the firm’s private placement exercise.

“The board, however, is not in a position to comment on the report about his plans to acquire equity shares of Focus from the open market,” Focus Dynamics said, adding that the company has not received any proposal from Chan to inject oil and gas projects into the firm.

Maybank president and CEO Datuk Seri Abdul Wahid Omar said the financial services provider plans to set up its branch office in Myanmar as soon as foreign banks are given the approval to do so. Shares of Maybank added one sen to close at RM8.73 on Tuesday.

The MMC Corp Bhd-Gamuda Bhd joint venture has clinched the underground package for the Sungai Buloh-Kajang MRT line with an RM8.2 billion bid. MMC shares climbed 15 sen to RM2.95 while Gamuda added 12 sen to RM3.74.

Cypark Resources targeted to generate turnover of about RM45 million from 2013 when the 33 MW solar capacity from its solar plants are completed.



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KLCI advances, BAT, KLK higher

KUALA LUMPUR (March 20): Blue chips advanced in early trade on Tuesday, with BAT and KL Kepong among the top gainers, on mild fund-buying while the broader market reflected slight upward bias.

At 10.03am, the KLCI was up 4.16 points to 1,577.76. Turnover was 614.96 million shares valued at RM215 million. There were 205 gainers, 180 losers while 275 counters were unchanged.

HwangDBS Vickers Research said the KLCI may still range-bound between the immediate support and resistance levels of 1,555 and 1,580 for the moment.

“Meanwhile, continuing from where it left off in recent times, the list of most actively traded stocks would continue to be hogged by the second and third liners,” it said.

BAT was the top gainer, adding 22 sen to RM52.60, KLK 20 sen to RM23.52, Tasek 12 sen to RM8.70 and Petronas Gas 12 sen also to RM16.52 while Lafarge Cement added eight sen to RM7.16.



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HDBSVR maintains Hold on SP Setia, TP RM4.50

KUALA LUMPUR (March 20): Hwang DBS Vickers Research is maintaining its Hold and Target Price of RM4.50 for S P Setia Bhd, based on 10% discount to RNAV of RM4.97.

It said on Tuesday S P Setia had announced that its public spread fell to below the required 25% minimum level as at Monday’s closing date for acceptance of the mandatory general offer, with Permodalan Nasional Bhd (PNB) and parties acting in concert (including Tan Sri Liew Kee Sin) holding 79% of shares and 88% of warrants.

HDBSVR said with PNB intending to maintain the listing status of S P Setia, an application will be made to Bursa Malaysia for a lower public spread or for an extension of time to rectify the issue within three months.

“We believe PNB will likely make a placement to improve S P Setia’s liquidity (4% stake works out to 75 million shares worth RM296 million a RM3.95 a share),” it said.

The research house said it still likes S P Setia for its strong track record (improved clarity on management continuity with Liew remaining fully in control for the next three years) and strong growth potential.

HDBSVR said S P Setia is on track to achieve its RM4 billion FY12 sales target (+21% on-year), with RM932 million chalked so far for the first three months and a brimming launch pipeline.

It added S P Setia is still looking for more landbank (including government land redevelopment and overseas projects) - leveraging on its strong balance sheet (net cash) and backing from PNB.



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HDBSVR: Malaysian equities could be losing steam

KUALA LUMPUR (March 19): Hwang DBS Vickers Research said technically speaking, Malaysian equities could be losing steam after slipping slightly below an uptrend line.

In its traders spectrum outlook issued on Monday, it said from a psychological perspective, signs of fatigue are starting to be visible on the local bourse judging by its subdued reactions to positive overseas leads of late.

“This may signal a downward bias with the KLCI probably sliding towards the bottom end of its 1,555-1,600 trading range going forward,” it said.

HDBSVR said after tumbling to an intra-week trough of 1,562.97, the KLCI barely recovered to finish at 1,571.40 on Friday, down 7.6-point or 0.5% week-on-week.

“Nevertheless, in the small-mid cap space, the FBM 70 Index (-0.4%) and the FBM ACE Index (+0.1%) saw mixed weekly changes,” it said.

HDBSVR said trading activity, meanwhile, matched the preceding week’s daily average volume of 1.5 billion shares valued at RM1.8 billion.

The research house said that in contrast, the bulls continue their reign in other parts of the region.

Last week, the indices staged a strong rally, the Philippines index was up 3.3% week-on-week, Thailand (+2.7%) and Japan (+2.0%) as eight of the 11 Asian stock exchanges tracked by HDBSVR ended in the positive territory.

With the eurozone’s sovereign debt strains being put on the backburner for the moment, key U.S. barometers also saw weekly gains of between 2.2% and 2.4%.

“On a year-to-date basis, Malaysia will likely finish the first quarter of the year with the smallest stock market return (of +2.7%) among the 11 regional bourses,” it said.

HDBSVR said with only two more weeks to end-1Q12, the current three best performers across Asia are Japan (up 19.8% so far this year), Philippines (+17.7%) and Thailand (+16.0%) while Wall Street indices were up between 8.3% and 17.3%.

“The relative underperformance of our local bourse – coming on the back of its resilient performance last year – could be partly attributable to a dearth of fresh re-rating catalysts, as well as possible jitters on the impending general election that is likely to be called in a matter of months,” it pointed out.

HDBSVR said the dry spell of market-moving news may drag on this week. The pipeline is expected to be fairly quiet except for: (a) Bank Negara Malaysia’s release of the 2011 Annual Report (which would reveal forward looking economic indicators like the central bank’s projections on GDP growth rate and inflation) on Wednesday; and (b) several listed companies – such as Berjaya Sports Toto (on Wednesday) and SP Setia (Thursday) – announcing their latest quarterly financial report cards.

“On the chart, a cut beneath (albeit just marginally) an uptrend line last week has raised the probability that the FBM KLCI would see weaknesses ahead.

“Unless the index climbs above the positive sloping trend line any time soon – which has been in existence since late Sep last year (chart overleaf) – a deeper market pullback may be on the cards,” it said.

HDBSVR said if so, then a double-top trend reversal pattern could be evolving. The research house said in particular, a negative technical outlook will be probable should the bellwether – after hitting a recent high of 1,595 to test its historical peak of 1,597 – drop below the support thresholds of 1,555 and 1,530 going forward.

However, on the upside, the resistance levels of 1,580 (immediate) and 1,600 (next) remain the stumbling blocks for the FBM KLCI to overcome.



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KL shares open higher on technical rebound

Share prices on Bursa Malaysia opened firmer today on technical rebound after tumbling in the final few minutes of trading on Friday for a daily loss of eight points.

Nineteen minutes after the opening bell, the FBM KLCI stood at 1,577.32, up 5.92 points. It had opened 2.9 points higher at 1,574.3. HwangDBS Vickers Research said there was no strong market lead coming in from abroad last week.

"Major US equity indices were little changed on Friday as Wall Street was in a consolidation mode," it said in a research note.

The global forecast for the Asian markets is flat with a hint of negativity in response to weaker-than-expected economic data from the US.

On Bursa Malaysia, the Finance Index advanced 47.53 points to 14,240.18, the Plantation Index added 6.24 points to 8,582.43 and the Industrial Index up 15.24 points to 2,830.97.

The FBM Emas Index climbed 37.6 points to 10,883.43, the FBM Mid 70 Index surged 35.79 points to 12,181.4 and the FBM ACE Index edged up 20.48 points to 4,685.24.

Gainers outnumbered losers 162 to 59, while 134 counters were unchanged, 1,138 untraded and 21 suspended. Volume stood at 213.596 million worth RM55.49 million.

Among active counters, Ariantec Global earned two sen to 11.5 sen, Pan Malaysia added half a sen to 5.5 sen while Metronic Global eased half a sen to 12 sen.

For heavyweights, Maybank unchanged at RM8.81, Sime Darby earned four sen to RM9.79, CIMB rose three sen to RM7.69 and Petronas Chemicals increased two sen to RM6.78. -- Bernama



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