Kuala Lumpur shares close lower on uncertainty, slower loan growth - UPDATE 4/10/2006
- Share prices closed lower as investors remained
on the sidelines, finding no fresh leads to counter uncertainty about the
market's new prospects after yesterday's profit-taking, dealers said.
Investors ignored Wall Street's record-breaking performance overnight, as
sentiment remained weak after recent data showed loan growth in the banking
sector slowed in August, they said.
The Kuala Lumpur Composite Index (KLCI) dropped 3.50 points or 0.36 pct
to close at 964.06.
The FTSE Bursa Malaysia 30 large cap index was down 21.82 points at 6,224.
56 while the second board index gained 0.03 points to 82.96.
Losers led gainers 332 to 328, with 374 issues unchanged and 282 untraded.
Trading volume was 464.85 mln shares valued at 659.29 mln rgt.
Referring to recent central bank figures, Maybank Securities said the
banking system's loan growth in August slowed to 8.6 pct year-on-year,
bringing the total loan outstanding to 586.5 bln rgt, mainly due to lower
disbursements.
''Forward-looking indicators have weakened, pointing toward slower growth
and showing moderation in the coming months. On a year-on-year basis, loans
approved declined by 6.4 pct to 16.3 bln rgt,'' Maybank Securities said in a
note to clients.
''The forward looking indicators for the household segment continued
their journey south with loans applications and loans approvals declining by
2.6 pct and 10.7 pct, respectively,'' the research house added.
Maybank Securities said it was not surprised by the data as banks have
tightened their credit policies.
TA Securities noted that the failure of the market to breach the
970-point resistance level is likely to help maintain the market's bearish
momentum.
''Expect further downside bias, as KLCI will need to re-build its
immediate support platform nearer the 960-point level in the short term,'' TA
Securities said.
At the close, the finance index shed 6.33 points to 7740.30, with most of
the banking stocks either down or flat.
AMMB closed down 0.01 rgt at 2.49, CIMB slipped 0.05 rgt to 6.70, Eon Cap
was flat at 5.75, HLFG was unchanged at 4.58 while RHB Cap dropped 0.04 rgt
or 1.39 pct to 2.83.
Among the heavyweight stocks, Tenaga was down 0.05 rgt at 9.55, Maybank
steady at 11.20 while Telekom Malaysia lost 0.05 rgt to 9.10.
Elsewhere, Road Builder (M) Holdings Bhd was sharply lower after news of
an off-market purchase of its 68 mln shares by an unidentified buyer
triggered speculation the company might be a target of a takeover.
Following the news report, Road Builder said trading in its shares has
been suspended in conjunction with the announcement that vice chairman Chua
Hock Chin has ceased to be a substantial shareholder of the company. The
stock exchange has separately announced that Chua has also resigned from the
company as vice-chairman.
Trading in the shares will resume tomorrow, the company said in a filing
with Bursa Malaysia.
Road Builder was last traded at 2.71 rgt, down 0.09 or 3.21 pct.
Berjaya Capital Bhd was higher on follow-through buying as investors
continued to hold a positive view of Sompo Japan Insurance Inc's proposed
purchase of a 30 pct stake in Berjaya unit Berjaya General Insurance Bhd.
Berjaya Capital was up 0.07 rgt or 5.93 pct at 1.25.
AirAsia Bhd was higher on expectations of higher eanings for the company
due to the fall in crude oil prices, gaining 0.03 rgt or 1.99 pct at 1.54.
Light crude settled at 58.68 usd per barrel, down 2.35 usd on the New York
Mercantile Exchange overnight, continuing to fall from as high as 78.40 usd a
barrel in July.
Time dotCom Bhd was lower on profit-taking after two days of gains on
follow-through buying as traders continued to speculate that Digi.Com Bhd is
planning to acquire the company.
The stock eased 0.005 rgt to 0.655.
Hiap Teck Venture Bhd was higher on a report the company will invest 15
mln rgt to increase its production capacity to help meet months of backlog
orders gaining 0.015 rgt at 0.985.

For tomorrow... market will move toward 970 points...

For CPO market will down below 1500 levels...

Regard

Anthony Wong