Kuala Lumpur shares close easier on regional weakness after nuclear test
-UPDATE 9/10/2006
- Share prices closed slightly lower in
rangebound trade, dragged by weakness across the region in reaction to North
Korea's nuclear test, dealers said.
They said investors trimmed their blue-chip positions before moving to
the sidelines to await further developments on the nuclear test.
The Kuala Lumpur Composite Index closed down 1.60 points or 0.17 pct at
969.38.
The FTSE Bursa Malaysia 30 large-cap index lost 15.30 points to 6,271.47,
while the second board index eased 0.03 points to 83.74.
Losers outnumbered gainers 385 to 303, with 324 stocks unchanged and 305
untraded.
Trading volume was 489.82 mln shares valued at 712.61mln rgt.
"Overall, judging from the mild knee-jerk reaction to the nuclear test, I
do not see much follow-through effect in the coming days, unless it (North
Korea's action) develops into a bigger problem," a local brokerage dealer
said.
He warned that market sentiment is expected to remain weak in the next
few days as investors remain sidelined ahead of fresh leads.
Investors are likely to keep a close watch tomorrow on Japan and Taiwan,
which were closed today due to public holidays, to see how their markets
would react to the nuclear test by the neighbor state, in defiance of
international warnings against it.
EON Capital Securities head of research Pong Teng Siew said the market is
expected to continue to be docile as most of the investors in the local
market are local funds and retail investors are not as sensitive to such news
as North Korea's nuclear test, compared to foreign funds, which put a strong
weight on geopolitical risks in deciding their investment strategies.
"I see this (news) affecting major markets like Singapore, Japan,
Taiwan , Hong Kong, and (South) Korea, which have strong foreign funds
weightings," Pong said.
'In the immediate term, there could be some knee-jerk reaction, but in
the longer term, I think this will be a non-event,'' said Ng Jun Sheng,
senior investment analyst at SBB Securities.
Ng said the local bourse may see some consolidation in the next few
months, with the benchmark KLCI seen moving within the range of 950-970
points due to domestic-driven factors, such as the slow implementation of the
9th Malaysia Plan.
"It is crucial that a resurgence of strong daily trading momentum on
the broader market, preferably above the 700 mln shares (turnover) mark, to
sustain a bullish breakout above the formidable double-top resistance near
970 on the KLCI," TA Securities said in a note to clients.
Among the heavyweights, Tenaga rose 0.10 rgt to 9.80, Telekom Malaysia
was down 0.05 rgt at 9.05 and Maybank fell 0.10 rgt to 11.20.
Genting Bhd was up 0.275 rgt at 25.50 ahead of the close of bidding for a
second casino resort in Singapore.
Talam Corp Bhd was up 0.005 rgt at 0.125 rgt on news that the property
firm has made progress in its debt settlement plans.
Pan Malaysian Industries Bhd was up 0.01 rgt at 0.035 in active trading
after the company said it is working on a revised regularization plan after
canceling its proposed capital reduction and rights issue.
Furniweb Industrial Products Bhd was higher by 0.045 rgt or 10.34 pct at
0.48 after a new major shareholder emerged.
Top Glove Corp Bhd added 0.10 rgt to 8.95 after the rubber glove maker
said it has reached a settlement deal with the immigration department on the
renewal of work permits for its foreign workers.

For tomorrow...market down trend began...target 950 points...

For CPO market...correction is see toward 1500 levels...

Regard

Anthony Wong