KUALA LUMPUR (Jan 10): The FBM KLCI edged marginally higher at the close on Tuesday, in line with the gains at most key regional markets.
Analysts, however, cautioned that the outlook remains fragile, given external headwinds.
The 30-stock FBM KLCI edged up 0.26 of a point higher to 1,521.99, lifted by select blue chips.
Gainers overtook losers by 416 to 330, while 346 counters traded unchanged. Volume was 1.86 billion shares valued at RM1.87 billion.
At the regional markets, the Shanghai Composite Index rose 2.69% to 2,285.74, South Korea’s Kospi was up 1.46% to 1,853.22, Taiwan’s Taiex gained 1.21% to 7,178.87, Hong Kong’s Hang Seng Index rose 0.73% to 19,004.28, Japan’s Nikkei 225 was up 0.38% to 8.422.26 and Singapore’s Straits Times Index
Meanwhile, European stocks rose but the euro stayed under pressure on Tuesday, with markets nervous about the outlook for the region's economy and banks, prospects for government debt sales and a slowdown in the export-focused Chinese economy, according to Reuters.
MIDF Research acting head of equity Syed Muhammed Kifni said the market was expected to remain jittery going forward with the possibility of the KLCI re-testing its 2011 lows.
Nonetheless, he said that the Euro debt issue would begin to show credible signs of healing later in the 1H2012, adding that when that transpires, the underperforming indices can be expected to show swifter resurgence on the way up.
In contrast, the KLCI is anticipated to experience relative underperformance during the recovery phase, he said.
“With that in mind, we reiterate our KLCI year-end 2012 base case target of 1,530 points.
“As our base case KLCI year-end target for this year virtually matched its 2011 close, in our view, 2012 may quintessentially be a consolidation year.
In his review of the second half of 2011, Syed Muhammed said it was clear that during the turbulence period of 2H2011 (beginning end-July), the performance of key major and regional equity benchmarks could be grouped into four distinct classes, i.e. out-performers, mid-performers, under-performers, and China.
He said the outperformers comprised of S&P500 (SPX), Philippines Composite (PCOMP) and the FBM KLCI.
He said the US benchmark benefitted somewhat from either, (i) a plain misdiagnosis, or (ii) market conditioning, by the US Fed when it publicly warned earlier of the “significant downside risks” to the economy.
He said the FBM KLCI, was also among the least volatile due to its relatively nature vis-Ã -vis the other markets in the region.
Syed Muhammed said the mid-performers were the Jakarta Composite Index and Thailand’s SET, while the under-performers’ group comprised the Euro region benchmark (SX5E) as well as developed Asian (i.e. Hong Kong’s HSI, Korea’s KOSPI, Taiwan’s TWSE, and Singapore’s FSSTI) markets.
“We believe the underperformances reflect the relative sensitiveness of their economies towards the crisis-hit Euro region,” he said.
On Bursa Malaysia, United PLANTATION []s was the top gainer and rose 78 sen to RM20; F&N added 28 sen to RM19.02, Petronas Dagangan and KLK up 26 sen each to RM17.40 and RM24.84, LPI Capital and Petronas Gas 24 sen each to RM14.08 and RM15.34, Maybulk 23 sen to RM1.95 and Malaysia Smelting Corp 20 sen to RM4.27.
Takaso was the most actively traded counter this morning with 79.2 million shares done. The stock gained half a sen to 24.5 sen.
Other actives included JCY, MBSB, XDL, HWGB, Time, Versatile and KHSB.
Decliners included Genting, GAB, KLCCP, Lafarge Malayan Cement, Tradewinds, MMHE, Amway and KPJ.
