Kuala Lumpur shares close mixed on trading fears; KLCI firmer - UPDATE 17/8/2006
- Share prices closed mixed on concerns that the
authorities will come down hard on speculative stocks after Bursa queried
Mobif about unusual market activity, with the stock falling by more than 50
pct today, dealers said.
The benchmark index, however, closed firmer on support from local
institutions which were bullish that the upcoming budget will give the
economy and businesses a boost.
The Kuala Lumpur Composite Index (KLCI) closed up 4.10 points or 0.44 pct
at 942.08.
The FTSE Bursa Malaysia 30 large-cap index rose 27.54 points to 6,098.32,
while the second board index was down 1.11 points at 86.50.
The mining sector posted the biggest gains, with the sub-index up 26.43
points or 6.38 pct at 440.53.
Losers outnumbered gainers 482 to 243, with 302 stocks unchanged.
Trading volume was 562.37 mln shares valued at 838.26 mln rgt.
A local brokerage dealer said the weaker sentiment in the broader market
is due to concerns that the authorities will come hard on speculative
counters after it queried Mobif for the unusual market activity regarding its
share price in recent days.
"Investors do not want to be caught in a situation where a counter is
designated like Iris Corp shares months back. It is horrifying even to think
of it, let alone be caught in such a situation," he added.
He said he is of the view that this is holding back investors, especially
from taking up strong positions.
"I believe the strong interest in heavyweight blue chips was coming
mainly from local institutional investors who have a more bullish view of the
market," said EON Capital Securities head of research Pong Teng Siew.
"Their bullish view stems from expectations that the country's upcoming
budget will be positive in pump-priming the economy and businesses, providing
a good impetus for the market," Pong added.
TA Securities said in a note to clients that, despite the strong rally in
US stocks on the back of an unexpected decline in producer prices, selling
drove down some other blue chips given concerns that domestic inflation has
yet to peak, despite assurances to the contrary from the Bank Negara
governor.
However, TA said it views the falls as a healthy correction, since the
market's technical momentum may still be at an overbought level and needs to
see significant profit-taking.
TA said the market can expect the KLCI's immediate support level to be
around 930 points.
Among blue chips, Genting was up 0.50 rgt at 24.70, BAT Malaysia rose 0.
50 rgt to 41.50 and Nestle advanced 0.30 rgt to 24.30.
Mobif fell sharply by 1.83 rgt or 50.83 pct to 1.77, following the query
from the stock exchange about unusual market activity.
IOI Corp was lower by 0.20 rgt at 16.40 on profit-taking, after posting
weaker full-year net profit.
IJM Corp rose 0.10 rgt to 5.85, after posting an improved net profit for
the first quarter to June.
Malaysian Pacific Industries gained 0.15 rgt to 10.10, after posting a
126 pct rise in full-year net profit.

For tomorrow...SHORT KLOFF if market move higher...target 900 points...

For CPO market... market must rebound after sharp fall...target RM1650 near term...

Regard


Anthony Wong