THE KLSE staged a late rebound yesterday on news that asset management firm Valuecap Sdn Bhd had started investing in local equities.
The announcement by Valuecap that it would invest up to RM10bil over a period of time sparked late buying interest in an otherwise lacklustre stock market.
The newly established Valuecap is an investment holding company equally owned by Khazanah Nasional Bhd, Permodalan Nasional Bhd and Kumpulan Wang Amanah Pencen.
The benchmark Composite Index (CI) rose 9.24 points or 1.5% to 635 yesterday. Trading volume increased to 186 million from 112.7 million the day before.
Heavyweight blue chips, banking stocks and selected conglomerates – MALAYSIAN RESOURCES CORP Bhd (MRCB) and Renong Bhd in particular – were actively traded yesterday.
Renong topped the ten most active list, followed by Commerce Asset-Holding Bhd (CAHB) and MRCB.
Buying increased in the afternoon as the news hit the streets.
Analysts commented that the fresh funds would stimulate investing interest, particularly from retail investors who had shied away.
“The news will help revive investor confidence on the KLSE,'' said a senior analyst.
He said Valuecap's investments would provide a “floor” to share prices.
Investors would be less pessimistic knowing that RM10bil was there to bargain hunt should share prices fall further, he added.
TA Asset Management Sdn Bhd senior general manager Ang Kok Heng commented that the timing was right for Valuecap, given that many fundamentally sound stocks were undervalued.
Ang, , however, pointed out that it would not be healthy for the market if share prices of poor fundamental companies were inflated.
“It is good if Valuecap lives up to its name to invest in valued stocks,'' said OSK Research Sdn Bhd senior research manager Pankaj Kumar.
Some analysts said the news would create knee-jerk reactions that would shore up the market temporarily.
But the external uncertainties – war prospects in Iraq and the US economic health – would continue to weigh down sentiment, they added.Valuecap aims to provide leadership and liquidity