THE KLSE rebounded strongly yesterday, in apparent defiance of the cloud of uncertainty that has hung over the market since last week as a US-led military action against Iraq looks increasingly imminent.
After five successive days of losses, the KLSE benchmark Composite Index (CI) regained some lost ground by ending 7.01 points or 1.05% up at 671.63 yesterday. Although the market opened 1.57 points lower in the morning, it picked up momentum in the afternoon led by selected blue chips, and buying interest pushed the CI higher at the close of the day.
The broader Emas Index rose in tandem, closing 2.22 points higher at 163.21, while the Second Board Index inched 1.35 points ahead to 100.49.
The sharp contrast to the performance of the market on Monday and over the past week prompted a dealer to describe yesterday as “quite a surprise” when gainers outnumbered losers 549 to 149, and 112 counters closed unchanged.
With 441 million shares changing hands, the total volume was also significantly higher than any day during the past week, leading some analysts to speculate that Valuecap Sdn Bhd could be in the market again yesterday.
Despite the rebound, however, the underlying market sentiment remained uncertain, he said.
TA Securities head of research C.K. Ngu said the volume of transactions suggested that local institutional investors were also cherry- picking on the KLSE.
Renong Bhd was the most active stock with 25 million shares traded. It gained 4 sen to close at 51.5 sen. Also heavily traded were banking stocks AMMB Holdings Bhd and Malayan Banking Bhd (Maybank) with 19 million shares changing hands each. AMMB gained 16 sen to close at RM3.70 while Maybank rose 5 sen to RM8.15.
Gaming stocks dominated the gainers list of the day, led by Resorts World Bhd rising 60 sen to RM10.40. Genting Bhd gained 50 sen to close at RM14.60 while Tanjong plc rose 30 sen to RM8.95.
Among the top gainers was Maxis Communications Bhd on speculation yesterday that the government would soon give the go-ahead for the building of third generation (3G) mobile networks. Reuters reported an industry source as saying that Telekom Malaysia Bhd and Maxis would be given the green light to start building the networks soon despite weaknesses in their business plans.
“Their business plans will be allowed to go through, but it's mainly because the government doesn't want to delay commercial rollout,” the source said.
Both companies won their 3G licences in July last year, subject to roll-out plans meeting prescribed standards.
Malaysia plans to introduce 3G services next year, providing high-speed Internet connections over mobile phones and other wireless devices. The source, however, declined to say what sort of conditions would be imposed, or what the weaknesses were in the Telekom and Maxis proposals.
Maxis shares rose 20 sen to close at RM5.75 while Telekom Malaysia gained 5 sen to RM8.10.
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