Last-minute buying of heavyweight stocks lifts CI

LAST-minute buying of heavyweight counters helped drive the KLSE Composite Index (CI) 7.4 points or nearly 1% higher to close at 825 yesterday. 

Dealers said there were late buying orders from foreign clients interested in accumulating selected blue chips even as some local funds were unwinding their positions to re-jig their investment portfolios. 

The overnight gains on Wall Street, which saw the Dow Jones Industrial Average touching a 32-month high of 10,738 points, also aided sentiment in the local market, they said. 

Telekom Malaysia Bhd was the largest contributor to the CI's rise. It rose 35 sen to RM9.60, accounting for 2.3 points of the CI's gain. 

Among other large-cap stocks, Malayan Banking Bhd rose 10 sen to RM10.40, Genting Bhd gained 20 sen to RM17.10, and Maxis Communications Bhd added five sen to RM8. 

Commerce Asset-Holding Bhd (CAHB) closed 12 sen higher at RM4.66 as investors snapped up the stock on reports that CIMB Bhd planned to acquire TA Enterprise's securities firms to boost its retail stockbroking business. CAHB has a 74% equity interest in CIMB. 

Analysts said Public Bank Bhd's spectacular 2003 results also gave a boost to financial stocks as a whole. 

AMMB Holdings Bhd, for instance, closed 12 sen up at RM3.52 and Southern Bank Bhd rose five sen to RM3. 

Some analysts noted, however, that Public Bank's loan growth had outperformed the industry average. Hence, the results of other financial institutions might not be as good as the Public Bank group's. 

Public Bank's foreign tranche was the third most actively traded counter yesterday with 13.5 million shares changing hands, but the share price fell four sen to RM3.30. The bank's local shares closed unchanged at RM3.02. 

Analysts said the market was expected to focus on corporate earnings in the coming weeks, apart from the growing speculation that a general election was around the corner. 

Next Tuesday's meeting of the investment committee of the California Public Employees’ Retirement System (CalPERS) would also be on the minds of many. If the pension fund decided to return to the Malaysian market after an absence of two years, that would be a catalyst for another run-up. 

Analysts do not pin much hope on CalPERS returning so soon, but news that the fund's investment adviser Wilshire Consulting had recommended that Malaysia be included in its list of emerging market investments has raised hopes that more foreign investors would consider the local bourse when allocating their funds. 

The head of research of a local stockbroking firm said the Malaysian market would be more appealing to foreign investors only if listed companies could beat earnings estimates by a wide margin. 

“Earnings that exceed expectations substantially will prompt analysts to raise their earnings forecasts and hence valuation will become cheaper,'' he said. 

However, a research manager with foreign stockbroking firm explained that the local bourse was considered as less attractive than some other emerging markets such as Thailand, Indonesia and South Korea because the valuation of a number of local large-cap stocks was relatively expensive. 

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