Kuala Lumpur shares close firmer ahead of central bank rate decision - UPDATE 25/8/2006
- Share prices closed slightly higher in thin
trade, with sentiment remaining fragile ahead of Bank Negara Malaysia's
interest rate decision due out later in the day, dealers said.
They said the market also looks set to continue trading rangebound next
week ahead of the release of second-quarter gross domestic product (GDP)
growth data on Wednesday and the announcement of the 2007 Budget on Friday.
The Kuala Lumpur Composite Index (KLCI) closed the day up 2.39 points or
0.25 pct at 950.52. For the week, the KLCI was up 7.6 points or 0.8 pct.
The FTSE Bursa Malaysia 30 large-cap index was up 4.95 points or 0.08 pct
at 6146.67.
The second board index was 0.36 points or 0.46 pct firmer at 84.25.
Gainers outnumbered losers 420 to 260, with 348 stocks unchanged and 291
counters untraded. Trading volume was 410.28 mln shares valued at 619.89 mln
rgt.
Bank Negara Malaysia has kept its overnight policy rate at 3.50 pct since
May this year.
An economist with a local bank-based brokerage had said the central bank
is not likely to raise its key rate in today's meeting as the governor had
mentioned several times in the past that the inflation rate is likely to
moderate in the second half and there is no urgency to raise the rate.
Today, Cheah King Yoong, head of research at SJ Securities said "the next
thing we would be looking at is the second-quarter GDP growth data."
He said if the government reports favorable economic growth for the
second quarter, chances for the central bank to raise its key rate in the
second half will be higher.
GDP data will be announced on Wednesday. Trading will be suspended on
Thursday as Malaysia celebrates its 49th National Day. On Friday, Prime
Minister Abdullah Ahmad Badawi will present the 2007 Budget to parliament.
Cheah said he does not expect the upcoming Budget 2007 to have a major
impact on the stock market.
"For next week, we expect the benchmark KLCI to continue to trade within
a tight range, with resistance seen at 955 points, and 944 points is the
support level," he said.
Nevertheless, breweries and tobacco companies are expected to experience
some volatility as the government is likely to impose a higher excise duty on
the so-called "sin industries" in the upcoming budget, Cheah said.
British American Tobacco finished the day down 0.50 rgt or 1.16 pct at 42.
50 and Carlsberg lost 0.02 rgt to 4.98.
Malaysia Airlines is expected to release its first-half to June results
next week. The national carrier gained 0.01 rgt to 3.00, while budget airline
AirAsia held steady at 1.36 rgt ahead its full-year results next week.
Among key blue chips, Mayban was higher after posting a surprise increase
in its fourth quarter net profit. The banking group ended the day up 0.20 rgt
or 1.85 pct at 11.00.
National utilities firm Tenaga was flat at 9.20 rgt and Telekom Malaysia
was unchanged at 9.05.
Mobilephone operator Maxis fell 0.15 rgt or 1.69 pct to 8.70 on concerns
that its loss-making Indonesian operation is likely to drag down its
full-year performance, dealers said.
Worldwide Holdings was sharply higher on its parent's offer of 3.50 rgt
per share to take the unit private. The stock rose 0.66 rgt or 25.98 pct to 3.
20.
KNM Group extended yesterday's sharp gains, rising 0.25 rgt or 2.98 pct
to 8.65. The oil and gas firm said its net profit rose fivefold in the second
quarter to June.
Edaran Otomobil Nasional was down 0.07 rgt or 3.33 pct at 2.03 after
posting weaker-than-expected interim net profit. The car dealer said the
weak performance was mainly due to poor Proton car sales.
Proton ended the day up 0.14 rgt or 3 pct at 4.80.

For next week...SHORT KLOFF...target 900 points...

For CPO Market going down...target 1550 points near term...

Regard

Anthony Wong