Kuala Lumpur shares close flat ahead of central bank policy meeting - UPDATE 22/9/2006
- Share prices close little changed ahead of Bank
Negara Malaysia's decision on interest rates at a meeting next Tuesday,
dealers said.
They said the central bank is expected to keep its key rate unchanged at
3.50 pct after the government reported a mild increase in inflation for
August.
The market narrowed its losses from the morning session, when Tenaga led
the fall following reports the energy/water minister warned against
speculating on the renegotiations of power purchase agreements with the
independent power producers.
The Kuala Lumpur Composite Index (KLCI) closed down 0.85 points or 0.09
pct at 965.23, off a low of 962.69 points. For the week, the KLCI was up 3.24
points or 0.65 pct.
The FTSE Bursa Malaysia 30 large cap index in today's trade was up 0.85
points or 0.01 pct at 6,243.75. The second board index was up 0.33 points or
0.39 pct at 83.86.
Trading volume was 456.928 mln shares, valued at 685.09 mln rgt.
Gainers outnumbered losers 364 to 324, with 339 counters unchanged and
286 stocks untraded.
Bank Negara Malaysia's monetary policy committee will meet for the
seventh time this year next Tuesday (Sept 26) to decide on interest rates,
with analysts expecting the bank to hold its key rate steady at 3.50 pct.
"Expectations for another pause in rake hikes had been factored in by the
market," Teoh Cheng Guan, head of retail research at K&N Kenanga said.
Meanwhile, national energy firm Tenaga ended the day down 0.10 rgt at 10.
00 after it hit an intraday low of 9.90 rgt.
Minister of Energy, Water and Communications, Lim Keng Yaik, reportedly
warned all parties involved to stop from speculating on the renegotiations of
power purchase agreements with independent power producers (IPPs).
He was quoted by the New Straits Times as saying: "We have not finalized
anything yet. So please do not speculate and send false information to
investors causing share prices to go up and down like a yo-yo."
The minister also said that the government hopes to wrap up talks on
price reviews with the IPPs by year-end.
"I don't think the negotiations can be concluded by the end of this year,
" said a power sector analyst from a local brokerage.
"My fair value for Tenaga is rather conservative as I have put in a
higher forecast for its gas costs," the analyst said, adding that he expects
Tenaga will have to pay 20 pct more for natural gas when the energy firm
renews its contract with Petronas.
Teoh of K&N said he expects the benchmark KLCI to hold up well into the
fourth quarter, supported by window dressing by local institutional funds.
Banking stocks ended the day mixed after the government's move to ban
banks from charging fees for over-the-counters services, with Maybank rising
0.10 rgt or 0.89 pct to 11.30, while Bumiputra-Commerce Holdings Bhd was down
0.05 rgt at 6.40 and Public Bank down 0.05 rgt at 6.75.
SPSetia was unchanged at 3.78 rgt despite the property firm posted a
sharp rise in its net profit for the third quarter to July.
"Investors were unwilling to pay for a higher price for SP Setia as its
earnings are seen peaking at the currrent level," an analyst from a local
brokerage said.
AirAsia rose 0.01 rgt to 1.62 after the budget carrrier's chief executive
officer Tony Fernandes assured investors that AirAsia sees no disruption in
its operation in Thailand.
Malaysia Airlines was sharply higher despite crude oil prices have
rebounded from six months low, rising 0.20 rgt or 6.37 pct to 3.34.
Rashid Hussain Bhd (RHB) and Utama Banking Group were both higher on
continued talk that the Employees Provident Fund here may offer a higher
price for Utama's entire stake in RHB.
RHB rose 0.15 rgt or 11.28 pct to 1.48 and Utama gained 0.11 rgt or 9.91
pct to 1.22.

For KLOFF next week...any uptrend is a good sell signal...

For CPO market...uptrend is formed...target 1560 poins...

Regard

Anthony Wong