Kuala Lumpur shares close flat as export worries negate Wall St-led gains
UPDATE 27/9/2006
- Share prices closed flat as Wall Street's sharp
overnight gains provided little support to a market worried that the
country's exports might be negatively affected by a slowing global economy,
dealers said.
Trading remained quiet in the absence of buying support from local funds
and the usual speculative interest from retail investors, who have taken a
"wait-and-see approach" to the market, they said.
The Kuala Lumpur Composite Index (KLCI) was up a slight 0.66 points at
966.32, having firmed from 965.91at the morning close and 965.69 at opening.
The FTSE Bursa Malaysia 30 large cap index gained 4.83 points to 6,250.
02 , while the second board index eased 0.17 to 83.25.
Gainers outnumbered losers 333 to 332, with 359 stocks unchanged and 289
counters untraded.
Trading volume was 445.18 mln shares valued 722.93 mln rgt.
"Market activity, as expected, remained dull and unattractive to
investors who are basically playing it safe with a wait-and-see stance," a
local brokerage dealer said.
He said immediate support remained weak due to waning buying interest
from local funds, which were consolidating their market positions.
"Investors are just frustrated by the lack of newsflow and slow-moving
progress in government spending. Everthing seems to be on low gear," he
added.
EON Cap Securities head of research Pong Teng Siew said the market lacked
strong themes that could lift sentiment and generate vibrant buying activity.
He said concerns over Malaysian exports being negatively affected by
slowing global economic growth, especially in markets such as the United
States, were putting a damper on buying activity.
Pong said Malaysia's August trade figures, which are due for release by
the end of the month, are expected to show only modest export growth, in line
with slowing electronic and electrical products exports and lower prices of
petroleum-related exports due to weaker crude oil prices.
"The worry is that the United States, the country's biggest export
market, could be in for a hard landing rather than a soft landing. It is
always very difficult to engineer a soft landing. It would be quite bad for
Malaysia if the United States were to experience a hard landing, with exports
badly affected," Pong added
Mayban Securities, in a note to clients, said the KLCI is expected to
trade within a limited range for the rest of the week, with a slight downside
bias, as technical indicators are already trending deeper into the overbought
region.
"This week, the KLCI is expected to trend within the 955-970-point range.
With momentum easing ... the trajectory of the KLCI would be limited at 968.
Again, the finance, plantation and transportation stocks are expected to be
actively traded," it added.
Mayban said however, Malaysia Airlines, Air Asia and MISC, are expected
to trend higher this week to take advantage of lower crude oil prices.
"The usual suspect lower-liners are expected to continue their (downward
drift) as the technical indicators have yet to initiate any positive
crossovers. Banking stocks are expected to end the week positively despite
news of the abolition of over-the-counter charges yesterday," Mayban added.
Among blue chips, Malayan Banking was down 0.10 rgt at 11.20, IOI Corp
fell 0.10 rgt to 16.00, and Tenaga Nasional was up 0.05 rgt at 9.90.
Sime Engineering Services gained 0.01 rgt to 0.71 on bargain-hunting
after it fell earlier when the company said it was currently not in talks to
acquire shares in Ramunia Holdings Bhd.
Bina Darulaman advanced 0.055 rgt to 0.865 after the company said it has
been awarded a 70 mln rgt construction contract by the Kedah state government.
VS Industry Bhd was uo 0.02 rgt at 1.61 after reporting a sharp rise in
its net profit for the year to July.
Talam Corp rose 0.005 rgt to 0.11 after the property firm said its net
loss for the first quarter to July had narrowed from a year earlier.

For tomorrow...if see market down is a good long signal...

For CPO market...market will trend down to 1500 level...

Regard

Anthony Wong