Kuala Lumpur shares close higher on foreign fund interest in blue chips -
UPDATE 09/11/2006
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KUALA LUMPUR (XFN-ASIA) - Share prices closed the day significantly
higher, with the key index driven by selective buying of blue chips by
foreign funds, dealers said.
They added that a technical rebound in plantation, timber and
construction counters also helped support the market.
The Kuala Lumpur Composite Index (KLCI) closed the day up 12.64 points or
1.23 pct at 1,019.93.
Turnover was 1.02 bln shares worth 1.48 bln rgt.
The FTSE Bursa Malaysia 30-large cap index rose 72.67 points to 6,562.56,
while the second board index gained 1.09 points to 88.12.
Gainers outnumbered losers 623 to 205, with 303 stocks unchanged and 192
untraded.
''Foreign funds have started buying into the local bourse, just recently,
and it's about time (they did),'' said Saifuddin Morat of Mayban Securities.
More foreign funds will enter the local bourse soon, based on previous
track record, he said.
''Indications are that they have spent only about 2-3 pct of their funds
on local stocks, and I expect more because previously they had spent about 15
pct of their allocated funds on the Malaysian market,'' he said.
He noted that the foreign funds have been buying up blue chips and ''that
is not surprising, as quite a few of our blue chips are undervalued, such as
Bumiputera-Commerce Holdings, Maybank, Tenaga and Proton.''
Proton Holdings Bhd was sharply higher on follow-through interest amid
market talk about a possible partnership between the company and Volkswagen
AG.

Later in the afternoon it was reported that Prime Minister Abdullah
Ahmad Badawi told reporters the government may allow Volkswagen to gain a
controlling stake in the ailing national carmaker.
Proton closed up 0.20 rgt or 3.85 pct at 5.40.
"It is an option we are considering at the moment. There is no approval
yet," the premier said.
"It all depends on detailed discussions. It is just an option," he said.
At the close, Maybank was up 0.20 rgt or 1.71 pct at 11.40, Tenaga jumped
0.40 rgt or 4 pct to 10.40, while Bumiputera Commerce added 0.15 rgt or 2.14
pct to 7.15.
Heavyweight Telekom Malaysia, another stock considered undervalued by
Saifuddin, gained 0.10 rgt or 1.11 pct at 9.10.
Meanwhile, plantation stocks were broadly higher, supported by the
continued uptrend in crude palm oil (CPO) futures, dealers said.
Kuala Lumpur Kepong gained 0.30 rgt or 2.27 pct to 13.50 rgt, IOI Corp
rose 0.30 rgt or 1.65 pct to 18.50 and PPB Oil was up 0.30 rgt or 3.43 pct at
9.05.
The benchmark January 2007 contract on Bursa Malaysia's derivatives
market was up 19 rgt at 1,693.
Investors have shown keen interest in plantation stocks, following the
surge in palm oil futures despite record high inventory, said Credit Suisse
First Boston in a note.
Construction counters also did well, supported by more positive news from
the construction sector, including the revival of the Kajang-Seremban Highway
project, dealers said.
IJM Corp Bhd was higher after the construction firm said it will team up
with Antah Holdings for the Kajang-Seremban highway.
IJM Corp was up 0.15 rgt or 2.4 pct at 6.40.
Another construction counter - Gamuda, also gained, adding 0.18 rgt or 4.
07 pct to 4.60.
Timber stocks Subur and Jaya Tiasa also rebounded on renewed speculative
interest.
Subur rose 0.82 rgt or 19.16 pct to 5.10 while Jaya Tiasa edged up 0.39
rgt or 13.04 pct to 3.38.

For tomorow...market may correct for a further up trend...

For CPO Market...correction to 1600 levels...

STOCK TO WATCH

DAYA 0091 CL 0.25 FRONTKN 0128 CL 0.60 KANNAL 0077 CL 0.52

REDTONE 0032 CL 0.45 PA 7225 CL 0.80 DISTECH 0063 CL 0.32

BCTECH 0130 CL 0.65

Regard

Anthony Wong