Market up on technical rebound

  • Business
  • Thursday, 16 Dec 2004

THE Kuala Lumpur Composite Index (KLCI) closed up nearly 8 points at 904 on a technical rebound to break through the psychological 900-point mark after falling below that level four days ago. 

The surge, led by blue chips such as British American Tobacco (M) Bhd and Genting Bhd, also saw penny stocks rebound after being sold down the past two days. 

“The market seems to be trying to find a level before deciding which way to go,'' said the head of research of a local stock brokerage. 

The rebound in stocks also saw the volume and value of trade rise sharply. Volume amounted to 563 million shares, while the value crossed the RM1bil mark to RM1.03bil. 

Leading the surge was BAT, which rose RM1 to RM45. Genting closed 80 sen higher at RM19.40 on optimism that the company's international forays would deliver much better profits over the next few years. 

While the blue chips accounted for the bulk of the KLCI's gains, penny stocks drew a lot of interest from punters. 

“It was more of a technical rebound for the penny stocks. They were oversold, and the rebound does give the impression that the good times are back for such stocks,'' said the head of research of a local stockbroking house. 

Battered-down stocks such as Golden Plus Holdings Bhd (GPlus) and Multi Vest Resources Bhd (MVest) had sharp gains after collapsing over the previous two days. 

“It would appear that punters were fishing for bargains,'' an analyst said. Heading into 2005, a number of analysts are now looking to mid- and small-cap stocks with fundamental value to perform better. 

“The blue chips have had a fantastic year and there is a valuation gap that is emerging between that class of stocks and the small-cap stocks,'' the research head said. 

“Value is more appealing in the mid- to small-cap stocks. They have more upside.'' 

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