Kuala Lumpur shares close higher on rotational play in timber, oil & gas
-UPDATE 16/11/2006
- Share prices closed higher supported by
rotational interest in the oil and gas, as well as timber sectors, dealers
said.
Investor sentiment was also boosted by the central bank's relaxation of
rules governing merger and acquisition activities in the banking sector and
by recently-released strong corporate earnings results, they added.
The Kuala Lumpur Composite Index (KLCI) was up 9.22 points or 0.90 pct at
1,037.6.
The FTSE Bursa Malaysia 30-large cap was up 42.30 points or 0.64 pct at 6,
644.27 and the second board index was up 0.71 points or 0.80 pct at 89.27.
Gainers outnumbered losers 563 to 293, with 294 stocks unchanged and 169
untraded.
Trading volume was 1.21 bln shares valued at 1.55 bln rgt.
"Today's market was driven by rotational play in certain sectors, such as
the oil and gas firms. Market momentum remained strong. Based on our
technical analysis, the benchmark KLCI may touch 1,050 points soon," said a
fund manager from a local asset management firm.
"Our view is cautiously optimistic and we are still waiting for the
confirmation of a stronger rally before taking any aggressive positions," he
added.
Kaladher Govindan, head of research at TA Securities, said the local
bourse is now overbought and a minor correction could emerge soon.
On the central bank's decision to allow banks to hold multi-party
negotiations regarding the acquisition and disposal of their shares, Kaladher
said he expects smaller banks, such as AMMB and EON Capital to benefit from
the new ruling, as they will now have greater bargaining power.
"We believe there's more room for merger and acquisition plays over the
next 12 months," he added.
Among key blue chips, Maybank was down 0.10 rgt at 11.30, while Tenaga
gained 0.10 rgt to 10.50 and Telekom Malaysia was sharply higher at 9.55, up
0.45 rgt or 4.95 pct.
Banking group EON Capital was sharply higher at 6.35 rgt, up 0.35 rgt or
5.83 pct, and AMMB was up 0.14 rgt or 4.95 pct at 2.97.
Construction group IJM was sharply higher after posting improved
second-quarter net profit, with the stock rising 0.10 rgt or 1.15 pct to 6.75.
Cargo carrier Transmile group rose 0.20 rgt to 12.80, after the company
reported a sharp increase in its results for the third quarter to September.
TH Group was sharply lower by 0.005 rgt at 0.615, after its net loss for
the third quarter to September widened to 65.08 mln rgt from 7.62 mln.
Hume Industries was sharply higher, rising 0.20 rgt or 5.92 pct to 3.58,
on improved results for the first quarter to September.
Government-linked Guthrie Ropel gained 0.08 rgt to 4.12, after its net
profit for the third quarter to September tripled to 12.23 mln rgt.
Plantation group Highlands & Lowlands gained 0.08 rgt to 4.76 after its
third-quarter profit rose 39 pct to 37.5 mln rgt.
Timber firm Ta Ann and oil and gas company KNM Group were sharply higher
on rotational interest, with Ta Ann posting the biggest gain at 9.00 rgt,
rising 0.80 rgt or 9.76 pct, and KNM up 0.55 rgt or 7.75 pct at 7.65.
Palm oil producer IOI Corp was lower on profit-taking, with the stock
down 0.10 rgt at 18.40.
Kaladher of TA said valuations of major plantation stocks are now seen as
expensive.
"For exposure in the plantation sector, we have a "sell" call on
plantation stocks except Kuala Lumpur Kepong," the analyst said.
Kuala Lumpur Kepong finished the day up 0.30 rgt or 2.26 pct at 13.60.

For tomorrow...market is too strong...beware of profit taking on friday mood...

For CPO Market...profit taking to 1650 levels...

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