KL market takes a breather after recent sharp gains


  • Business
  • Thursday, 23 Jan 2003

BY KATHY FONG

THE KLSE took a breather yesterday as lingering fears of war in Iraq prompted investors to lock in their profits following the sharp rise in the share prices over the past few days. 

The benchmark Composite Index (CI) closed down 3.5 points at 672. Volume remained strong, although it was substantially lower at nearly 492 million shares compared with 633.4 million on Tuesday. 

A slight gain in the Second Board Index – up 1.15 points to 105.9 – indicated some trading interest had shifted to second board counters. 

Dealers noted that investors were generally cautious and took profit as the Jan 27 deadline for weapons inspectors in Iraq to release their report to the United Nations draws near. 

“Investors would not want to have long positions at this juncture...Many are worried that the war may break out sooner than expected,'' said J.F. Apex Securities dealing manager Peter Tai. 

He expects profit-taking to intensify and apply downward pressure on the CI ahead of the Chinese New Year.  

The KLSE is closed from Jan 31 to Feb 4. 

“Investors are likely to unwind their positions before the holidays. Anything could happen during that period,'' Tai said. 

Analysts said a war between the US and Iraq ''seems inevitable'' and concurred that war fears remained a major dampener on the KL market. 

“Market sentiment has no doubt been boosted by news of the operations of Valuecap, but we have yet to see full restoration of confidence,'' said a head of research at a local stockbroking house. 

He noted that institutional fund managers who had underweighed the market were just nibbling at shares and not investing aggressively. 

Day traders and stockists, who accounted for the bulk of the market volume, were trading at very short intervals, given the rising geopolitical tension, he added. 

The research head said it was a trading market and “one needs to be cautious and not be greedy”. 

For the latest KLSE indices and other information click here

 

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