Kuala Lumpur shares close firmer on renewed fund interest in plantations
-UPDATE 21/11/2006
- Share prices closed slightly higher as
plantation stocks attracted fresh buying interest from local funds after a
surge in crude palm oil prices boosted the companies' earnings prospects,
dealers said.
Rising timber prices also sustained optimism for the timber industry and
supported their stocks, with lower-liners and speculative counters tagging
along, they said.
Yesterday, February CPO contracts closed above the 1,800 rgt level, or at
1,864 rgt per metric ton.
Dealers cautioned, however, the market's direction has not been a
decisive upturn, though the index shows a firmer bias, with profit-taking
likely to be more pronounced tomorrow.
The Kuala Lumpur Composite Index (KLCI) closed up 2.64 points or 0.26 pct
at 1,036.16, off an intraday high of 1,037.22 and a low of 1,033.60.
The FTSE Bursa Malaysia 30-large cap index gained 16.38 points to 6,634.
90, while the second board index rose 1.04 points to 89.68.
The plantation sub-index jumped 94.59 pts or 2.34 pct to 4,136.92, while
the mining sector firmed 4.41 points or 0.96 pct to 462.56.
Gainers outnumbered losers 521 to 309, with 305 stocks unchanged and 186
untraded.
Trading volume was heavy at 990.28 mln shares valued at 1.25 bln rgt.
"It is quite difficult to call the immeadiate direction of the market as
it could go either way. However, any movement up or down in the next few days
I suspect would not be significant," a local brokerage dealer said.
He said follow-through buying in plantations and timber stocks is
expected to continue tomorrow, but gains would likely be capped by
profit-taking in counters like PPB Oil Palms Bhd, IOI Corp Bhd, and Jasa
Tiasa Holdings Bhd.
"Overall, my view is that at current levels, the market seems to be
pricey and further upside is Iimited ahead of fresh leads," he added.
Besides reacting positively to rising CPO and timber prices, investors
were also bullish on the construction sector due to the rollout of new
projects from the country's Ninth Malaysian Plan, as well as the robust
construction market in the Middle East, " EON Capital head of research Pong
Teng Siew said.
TA Securities, in a note clients, said a further downward correction will
be necessary before a fresh wave of buying could start.
"Hence, a further near-term downward bias toward the significant
resistance-turn-support level from the breakout point of 1,021 will be
anticipated before the KLCI stabilizes," it said.
"Going forward, once the overbought momentum has been neutralized by the
correction, the KLCI may then resume its uptrend to overcome the 1,051
resistance to higher upside targets of 1,078, 1,100 and then 1,138 points by
early next year," TA added.
Among blue chips, Bursa Malaysia was up 0.20 rgt at 6.80, Dutch Lady Milk
Industries rose 0.20 rgt to 11.20 and Malayan Banking was flat at 11.20.
Plantation stocks were broadly higher on strong buying interest after
crude palm oil futures breached 1,800 rgt yesterday.
PPB Oil Palms was up 0.45 rgt or 4.84 pct at 9.75, IOI Corp gained 0.40
rgt to 18.90, and United Plantations moved up 0.20 rgt to 8.60..
Timber stock Jaya Tiasa Holdings Bhd was sharply higher by 0.24 rgt or 7.
32 pct at 3.52 on continued investor interest in timber stocks.
Dealers said timber stocks have been rising sharply on rotational
interest after several timber firms reported strong earnings growth.
Media Prima Bhd jumped 0.14 rgt or 6.06 pct to 2.45 on the company's
move to enter the outdoor advertising business by acquiring a controlling
stake in Big Tree Sdn Bhd.
MTD Infraperdana Bhd fell 0.02 rg to 1.16 after the company said it has
no plans currently to return capital to shareholders, contrary to a report in
a local newspaper.

For tomorrow...market may resume it up trend...

For CPO Market...profit taking to 1800 levels...

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