Shares on the KLSE, especially small-cap stocks, rallied on strong volume yesterday as a number of corporate proposals boosted market sentiment.
The benchmark Composite Index (CI) rose 0.45% to 727 points and the Second Board Index climbed 2.75%, but the star performer of the day was the Mesdaq market, which saw its strongest gain since March 2002.
The Mesdaq index, spurred by sterling gains in the prices of heavyweight stocks such as Symphony House Bhd and Iris Corp Bhd, surged 8.5% to 135.8 points.
“After consolidating over the past month, share prices on the KLSE look set to stage a technical breakout anytime soon, judging by the return of investor confidence, promising economic data as well as more corporate activity,'' OSK Research said in a note yesterday.
A spike up in the value and volume of shares traded, both close to their highest levels in a month, heartened analysts who said it had given the market a foundation for a further run-up.
Yesterday's volume was 773 million shares worth RM1.15bil.
“The market looks good as long as the US market does not stumble,'' said Leong & Co research manager Tan Gid Loke.
Sentiment was appreciatively lifted by corporate announcements such as the purchase of Global Innovative Management Partners-ACT Sdn Bhd by Symphony House for RM200mil, and the proposed privatisation of Metrojaya Bhd by its parent Pan Malaysian Industries Bhd.
Symphony House shares, which resumed trading yesterday after a one-day suspension, rose 36% and those of Metrojaya by nearly 22%.
Another Mesdaq heavyweight, Iris Corp, saw its shares rise 6.15% to 34.5 sen after its 20%-owned associate signed a RM216mil contract with the government.
The Mesdaq index's big rise yesterday moves it close to the next resistance point of between 138 and 140.
Gains by heavyweight counters such as Malaysia International Shipping Corp, Telekom Malaysia Bhd and Public Bank Bhd were primarily responsible for the rise in the CI, as they contributed about 2.2 points to the index's gain.
Shares in Malayawata Steel Bhd rose slightly more than 10% to RM2.34 after the company released its first-quarter financial results.
Leong & Co's Tan said the results announced by companies during the current reporting season had been reasonable but that alone would not drive the market higher.
“Earnings are only one factor driving share prices. Liquidity and the direction of global markets, too, play an important role,'' he said.
Regionally, Seoul's Kospi rose 1.95% to 727 yesterday, Tokyo's Nikkei 225 climbed 1.65% to 9,913, Hong Kong's Hang Seng gained 0.7% to 10,374, and Singapore's Straits Times Index ended 0.47% higher at 1,598.
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