THE formation of an investment holding company with resources of up to RM10 billion invest in listed securities on the Kuala Lumpur Stock Exchange (KLSE) could well provide a fillip to the market next week.
An announcement of the establishment of Valuecap Sdn Bhd certainly helped boost the market yesterday. Trading in negative territory for most of the day, the market turned in the last two hours of trade as news of Valuecap lifted the market 9 points to end the day and week at 636 points, for a 2 point gain over the week.
Valuecap, which is equally-owned by Khazanah Nasional Bhd, Permodalan Nasional Bhd and the Employees Provident Fund, said the amount would be invested over a period of time depending on the value of the stocks and timing opportunities, and that its participation on the KLSE is expected to add vibrancy and activity to the market.
Meanwhile, a technical analyst expects the market to test the 650 level next week.
He says there is some upside for component stocks. However, lower liners and second board counters, “have still some way to go.”
But he cautions investors against having too high an expectation. “We're only talking about upside for blue chips, and not the others. Lower liners and second board stocks are still perceived to be high risk.''
At the end of the week, Maybank finished 10 sen higher to RM7.60; both Telekom and Tenaga were 20 sen lower to RM7.40 and RM8.85, respectively.
Similarly, Maxis Communications Bhd, a blue-eyed stock of the foreign funds, managed to end the week slightly up by 5 sen to RM5.40 after a slow start.
Blue chips that really came through for the week were GENTING BHD and its leisure unit Resort World Bhd. Both improved 30 sen to RM13.70 and RM9.70, respectively.
As in previous weeks, total volume traded was thin, amounting to 673.22 million shares only.
A head of research does not expect trading activity to pick up too much on the KLSE in the first quarter.
He notes external issues – the predominant ones being the dicey state of the US economy and US-Iraq war jitters – continue to dominate the market, overshadowing and outweighing domestic fundamentals.
Even the first listing for the year failed to excite.
Merchant bank, CIMB Bhd, was hoping for a big bang to start off the New Year and its new status as a listed entity. But that was not to be.
The counter opened for a 12 sen premium over its offer price of RM1.75 on Wednesday at RM1.87, and touched a high of RM1.90. But as the day wore on, CIMB finished with only a 4 sen cheer as investors locked in whatever profits they could.
The counter has been heavily traded since making its debut, ending Friday at RM1.83.