Kuala Lumpur shares close flat as foreign pressure offsets local support
UPDATE 12/9/2006
- Share prices closed little changed as selling
pressure from foreign investors met some support from local institutions,
dealers said.
Plantation stocks led the day's decline following recent gains.
Dealers said foreign investors will continue to sell their blue chip
holdings systematically in the next few days, taking advantage of any
intraday upswing, but trading will remain in a narrow range as institutional
funds will also maintain a certain level of interest.
The Kuala Lumpur Composite Index (KLCI) was down 2.02 points or 0.21pct
to close at 953.70.
The FTSE Bursa Malaysia 30-large cap index fell 5.97 points to 6,198.84.
The plantation sub-index was down 113.21 points or 3.13 pct at 3,507.03,
followed by the mining sector, with the sub-index down 6.61 points or 1.25
pct at 522.03.
The second board index gained 0.49 points to 83.05.
Trading volume was 710.72 mln shares valued at 824.69 mln rgt.
Gainers outnumbered losers 390 to 309, with 332 stocks unchanged and 290
counters untraded.
"The market is just sick and is crying out for news. Apart from Budget
2007, there just hasn't been any impetus for the market or for investors to
buy in the market," EON Cap Securities research manager for charts Lee Cheng
Hooi said.
He said he believes selling in the past few days was coming mainly from
foreign investors wanting to cash out of the Malaysian market due to
expensive valuations and a lack of fresh leads to justify further buying.
He said he sees the market's immediate support level at 943 points,
followed by 937 and 935.
"The sharp fall in Genting shares further hurt already fragile sentiment,
although the drop had been expected, as investors 'bought on rumors and sold
on news' of its purchase of an additional stake in Stanley Leisure, the UK's
largest casino operator," an analyst at OSK Securities said.
The analyst said local institutions took a breather as they now regard
blue chips' valuations as demanding.
Overall, he said trading remained cautious and the market is expected to
consolidate further before finding a stable base.
TA Securities, in a note to clients, said a further downward correction
is anticipated in blue chips and the KLCI, given the prevailing weak momentum
and market breadth, "which should tend to dampen buyers' resolve in the
near-term."
"With technical momentum indicators maintaining their bearish readings, a
further dip toward the 950-point immediate support is likely before more
meaningful bargain-hunting could emerge," the brokerage said.
"More sustainable support is seen at 937 if the 950 support gives way,"
TA added.
Among blue chips, IOI Corp was down 0.50 rgt at 15.80, Kuala Lumpur
Kepong fell 0.50 rgt to 10.80, while Telekom Malaysia rose 0.05 rgt to 9.15 .
Genting was down 0.60 rgt at 24.40 on profit-taking after unit Genting
International confirmed it is making a cash offer for Stanley Leisure.
Esso Malaysia slid 0.08 rgt to 3.68 on profit-taking after it gained
earlier on talk that its major shareholder ExxonMobil Corp may take the firm
private soon.
Sime Engineering Services advanced 0.04 rgt to 1.33 on hopes that the
company may secure two deals in the Middle East by year-end.
Lion Forest Industries was up 0.09 rgt at 2.78 on speculation the company
may be taken private by its major shareholder.
AirAsia Bhd rose 0.07 rgt or 5.11 pct to 1.44 on hopes that potential
liberalization of the lucrative Kuala Lumpur-Singapore route would boost the
budget airline's earnings.

For tomorrow...market will rebound...arget 970 points near term...

For CPO market...up then down tomoroow...

Regard

Anthony Wong