NEXT week is unlikely to bring much in the way of excitement to the Kuala Lumpur Stock Exchange (KLSE) as most investors will be away for the whole week for the Chinese New Year holidays. As such, market observers are bracing for a quiet, if somewhat dull, short trading week ahead.
Mayban Securities' technical analyst Heddy Humaizi Hussain does not expect the market to move strongly next week and has capped its movement at 670 points.
Traditionally, the post-Chinese New Year period usually bears witness to some profit taking activity. This year is not likely to be any different, he says.
“If there is a strong correction over the next three trading days, we then see this as a good opportunity for traders to accumulate as we are still positive over the medium term,” Heddy says, adding that second and third liners, merger and acquisition as well as restructuring plays can be expected to dominate the trading scene next week.
Another chartist believes that the “ang pow” will only come after Chinese New Year. “With the five-day weekend ahead and the threat of war looming in the horizon, it's understandable that not many would want to take up positions ahead of the long holiday season,” he says.
Mayban's Heddy says the whole scenario will be greatly altered should war against Iraq break out sometime next week. In the event that war is declared, Heddy says the market is likely to find support at 620 points.
A research head says an increase in the likelihood of war will certainly keep investors away and news so far seems to be pointing in this direction.
Pundits were in agreement that much of the excitement in the week ahead would stem from the US. President George W. Bush had said during his State of the Union address on Tuesday night that his secretary of state will deliver new intelligence on Iraqi weapons of mass destruction to the UN Security Council next week to strengthen the case for an attack.
As it is, his speech was littered with hints that the US would proceed to take military action against Iraq. Notwithstanding the nuances, the Dow Jones industrial average and tech-laden Nasdaq Composite still charged ahead to register gains of 22 points and 16 points to 8,110.71 and 1,358.06, respectively at Wednesday's close.
In the home front, the benchmark Composite Index (CI) rebounded strongly on Tuesday after five successive days of losses. However, it ended Thursday – the last trading day of this week - in negative territory at 665 points, down from 669 points last Friday.
Maxis Communications Bhd chalked up good gains on rumours that the government would soon give Telekom Malaysia Bhd and Maxis the go-ahead for the building of third generation mobile networks despite weaknesses in their business plans. Its shares closed on Thursday at RM5.60.
Malakoff Bhd, meanwhile, reported its first quarter to Nov 30, 2002, net profit of RM85.05 million, from RM84.38 million in the last comparable period, due to the contribution from GB3 and the commendable performance of the Lumut power plant. The counter finished off on Thursday at RM4.28.
KLSE main board debutante Ornapaper Bhd opened on its maiden day on the bourse at RM1.68 for an 8 sen premium over its offer price of RM1.60. The counter closed on Thursday at RM1.65.
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