Kuala Lumpur shares close higher on easing rate fears, led by Tenaga - UPDATE 18/9/2006
- Share prices closed higher as investor
sentiment turned positive, wiping out early losses, due to expectations that
the US Fed will keep its key rate unchanged at its upcoming policy meeting
this week, dealers said.
The benchmark index was also supported by sharp gains in national
utilities firm Tenaga on hopes that its renegotiations over power purchase
agreements with independent power producers may be concluded soon, favorably
for the state-owned company, they said.
The Kuala Lumpur Composite Index (KLCI) was up 6.56 points or 0.68 pct at
965.55.
The FTSE Bursa Malaysia 30-large cap index was up 37.00 points or 0.60
pct at 6,248.95 and the second board index was up 0.54 point or 0.65 pct at
84.08.
Trading volume was 550.997 mln shares valued at 945.654 mln rgt.
Gainers outnumbered losers4 25 to 285, with 309 stocks unchanged and 301
counters untraded.
"Market sentiment is improving, with the key concerns now subsiding,"
Vincent Khoo, head of research at Hwang-DBS Vickers, said.
The analyst said he believes global interest rates have peaked and that
the US Fed is likely to hold the benchmark rate steady at its current level
at its policy meeting this week.
However, he cautioned that Malaysian central bank may raise its key rate
in the next few months in a bid to narrow the gap between the US dollar and
the ringgit, although he added that any impact of a rate hike on the domestic
equity market is likely to be temporary.
Construction stocks were broadly higher on hopes of better earnings, with
investors expecting the government to speed up the implementation of projects
envisioned in its five-year development plan -- the Ninth Malaysia Plan
(9MP).
Wan Azhar Mustapha, investment analyst at OSK Securities, said he has
maintained an "overweight" recommendation on the construction sector since
early this year, mainly due to the launch of the 9MP.
He said premier construction companies like Gamuda and IJM Corp are
likely to benefit more from the revival of the construction sector.
"As for small-capitalization construction stocks, we have a 'buy' call on
Ahmad Zaki and Hock Seng Lee," he added.
Gamuda was up 0.08 rgt or 2.00 pct at 4.08, while IJM Corp lost 0.10 rgt
or 1.59 pct to 6.20.
Hock Seng Lee gained 0.02 rgt or 0.69 pct to 2.92 and Ahmad Zaki rose 0.
05 rgt or 2.38 pct to 2.15.
Wan Azhar also said he views Proton's move to form a partnership with PSA
Peugeot-Citroen positively.
"On the surface, it is a right step for Proton. However, it is too early
(to gauge the impact) and investors are likely to keep a wait-and-see stance
for the time being," the analyst said.
Proton ended the day up 0.10 rgt or 2.04 pct at 5.00.
Maybank closed higher at 11.30 rgt, gaining 0.10 rgt or 0.89 pct, while
Telekom Malaysia was down 0.05 rgt or 0.55 pct at 9.10.
Among gainers, Palm oil producer IOI Corp rebounded from profit-taking,
rising 0.30 rgt or 1.89 pct to 16.40.
Budget airline AirAsia was sharply higher on falling crude oil prices, up
0.11 rgt or 7.33 pct at 1.61.
CIMB Research recently upgrade the airline to "outperform" with a target
price of 1.95 rgt, saying a fuel hedge is imminent for the airline.
Malaysia Airlines was up 0.02 rgt or 0.65 pct at 3.12 despite managing
director Idris Jala's comment that the national carrier may see the
profitability of its Sabah and Sarawak routes adversely affected by the entry
of Singapore low-cost carrier Tiger Airways.
Utama Banking Group and Rashid Hussain Bhd (RHB) were both sharply higher
on speculation that the Employee Provident Fund may revise upward its offer
price for Utama's 32.8 pct stake in RHB. Utama was up 0.06 rgt or 5.71 pct at
1.11 and RHB was up 0.06 rgt or 4.84 pct at 1.30.
At the close, the ringgit was quoted at 3.6803/6853 to the dollar,
compared with Friday's close of 3.6755/6805.

For tomorrow, market up in morning...profit taking must be in afternoon...

For CPO market...market will collape to 1500 points...

Regard

Anthony Wong