Kuala Lumpur shares close lower on broad profit-taking after recent highs
UPDATE 5/9/2006
- Share prices closed lower on profit-taking
following strong recent gains, with the market largely ignoring
higher-than-expected growth in Malaysia's July exports, dealers said.
The market is likely to continue to consolidate tomorrow as it absorbs
further profit-taking, after the benchmark index hit a six-year high of 970.
46 in the morning session, they said.
The Kuala Lumpur Composite Index (KLCI) fell 4.38 points or 0.45 pct for
the day to close at 963.84.
The FTSE Bursa Malaysia 30-large cap index was down 21.46 points or 0.34
pct at 6,254.79.
The second board index was down 0.18 point or 0.22 pct at 82.71.
Trading volume was 456.975 mln shares valued at 694.735 mln rgt.
Losers outnumbered gainers 486 to 242, with 319 stocks unchanged and 272
counters untraded.
Stephen Soo, senior technical analyst at TA securities, said the market
faces very strong resistance at 970 points.
"We expect the (KLCI) to be capped below the 970-point level. For the
near-term outlook, it will be very difficult for the (index) to overcome the
six-year high," Soo said, adding that the KLCI's next support level is seen
at 950 points.
Among key blue chips, Tenaga lost 0.05 rgt or 0.54 pct to 9.20, Telekom
Malaysia fell 0.15 rgt or 1.63 pct to 9.05 while Maybank rose 0.10 rgt or 0.
88 pct to 11.40.
Genting was lower on profit-taking after posting sharp gains yesterday,
amid speculation that it has made a takeover offer for British casino
operator Stanley Leisure PLC.
The Malaysian conglomerate fell 0.25 rgt or 0.57 pct to 25.50. A
spokeswomen for the group has declined to comment on the reported bid for
Stanley Leisure.
Genting's associated firm Resorts finished the day down 0.20 rgt or 1.69
pct to 11.60.
Speculative lower-liner Tebrau was sharply lower on speculation the stock
could be suffering from forced selling by some parties, dealers said. Tebrau
ended the day down 0.12 rgt or 23.53 pct at 0.39.
Meanwhile, Malaysia's July exports reported a 16 pct rise to 50.58 bln
rgt, supported by sustained demand from the US, Europe and Japan, economists
said.
"The 16-pct growth in July export marks a good start for the second half,
" Yeah Kim Leng, managing director and chief economist at RAM Consultancy
Services Sdn Bhd said.
He also said he expects Malaysia to continue to register double-digit
export growth amid a possible slowdown in global economic growth in the
second half.
"We believe the US economy is likely to achieve a soft landing," the
economist said.
Citigroup said in a research note that Asia remains vulnerable and
sensitive to any US slowdown.
The brokerage said correlations between overall East Asian export growth
and major destinations -- the US, Europe and Japan, remain very tight.
Electronic firms Malaysia Pacific Industries fell 0.10 rgt to 10.10,
while Unisem was steady at 1.50 rgt and Globetronic was unchanged at 0.29 rgt.
Palm oil producers were broadly lower on profit-taking, with IOI Corp
falling 0.30 rgt or 1.69 pct to 17.40, PPB Oil Palms down 0.10 rgt or 1.23
pct at 8.05 and Kuala Lumpur Kepong down 0.10 rgt or 0.85 pct at 11.60.
Government-linked plantation firm Golden Hope, however, was higher on its
plan to set up a biodiesel plant joint venture in South Korea, rising 0.02
rgt to 4.92.

For tomorrow...any rebound is a good SHORT...near term 900 points...

CPO Market may correct to 1500 points...

Regard

Anhony Wong