Thursday, July 15, 2010

Blue chips snap winning streak

KUALA LUMPUR: Blue chips on Bursa Malaysia snapped their seventh-day winning streak on Thursday, July 15 as investors took the opportunity to lock in gains on the shares which had recently run up.

The FBM KLCI closed 7.0 points lower at 1,334.08, off its two-month high recorded on Wednesday. Turnover was 619.73 million shares valued at RM1.12 billion.'' Decliners led advancers 390 to 242. Year-to-date, the 30-stock index is up 4.82%.

Stocks which had a strong run-up in recent days, especially those paying high dividends, fell in relatively thin trade.

Panasonic Malaysia fell 36 sen to RM18.52 but with 2,800 shares done, Nestle shed 20 sen to RM35.80 and Parkson 11 sen to RM5.46 while BAT gave up 10 sen to RM43.90.

Tanjong lost 10 sen to RM17.38 while GENTING BHD [] lost nine sen to RM7.39 on concerns about the impact of a US state Supreme Court judge ordered a halt to the latest Aqueduct bidding process.

The New York Business reported that a state Supreme Court judge ordered a halt to the latest Aqueduct bidding process so he can consider a developer's lawsuit against the state for rescinding its lucrative racino contract.

The newspaper said a Lottery Division spokeswoman declined to comment, noting the agency hasn't been officially notified of the lawsuit or the temporary restraining order.

Meanwhile, Kumpulan Jetson's securities rebounded despite concerns about an impending boardroom tussle. Jetson rose 44 sen to RM1.55 and Jetson-WA 45.5 sen to 83.5 sen in active trade. Jetson-LA added 43 sen to RM1.54 in thin trade.

F&N was the top gainer, adding 60 sen to RM14.20 on expectations of a special dividend while KFCH extended its gains, rising 20 sen to RM11.12 and Cocoland also 20 sen to RM2.38.

Meanwhile, Reuters reported Southeast Asian stock markets mostly fell on Thursday, with Indonesia ending a rally that took it close to a record high and Singapore retreating from a 10-week peak as investors turned wary over the U.S. economy.

Investors cashed in on recent gainers across the region as the Philippines, which earlier scaled a 2-1/2-year peak, ending slightly lower and Vietnam falling 0.4 percent.

Indonesia's benchmark index hit an intra-day peak of 2,987.04, close to the record of 2,996.41 set on May 4, 2010. Bucking the trend, Thailand inched up 0.2 percent on late buying.

Despite the weakness, investors for the most part remained optimistic about the outlook for share markets in the region as strong Asian economies boded well for corporate earnings.

In its Asia Equity Strategy, Credit Suisse said it was staying overweight on Indonesia, seeing palm oil and coal as the most undervalued sectors, while Thailand and the Philippines were on its list of cheapest markets.

The ING Investor Dashboard survey showed that Southeast Asian emerging markets were looking increasingly attractive to wealthy Asian investors as they grew less optimistic about prospects in Greater China.

In Bangkok, Thai analysts raised their end-2010 target for Thai stocks to 849 as growth in the domestic and global economy plus the government's stimulus spending should bolster earnings. The index closed at 821.02 on Thursday.

The Thai stock exchange's president, Charamporn Jotikasthira, said a market roadshow in London this week got positive feedback from investors.

"The feedback was favourable, although there were still concerns about domestic political factors and problems at Map Ta Phut," he said, referring to the suspension of projects at the eastern industrial estate because of environmental concerns.

Thai stocks are the second-cheapest in the region by valuation after Vietnam. Bangkok trades at a 12-month forward price to earnings ratio of 10.8, after Vietnam's 10.7, according to Thomson Reuters StarMine.

Gainers in Bangkok included Siam Commercial Bank, which rose 0.6 percent ahead of quarterly results next week, and condominium developer LPN, which jumped 6.7 percent after it told Reuters it targeted 20 percent revenue growth this year.

Among losers in Jakarta, where the index trades at a 12-month forward price to earnings ratio of 13.8, the highest in Southeast Asia, coal miner Bumi Resources fell 3.7 percent and Adaro Energy dropped 1.2 percent.

In Singapore, property shares were mixed, with CapitaLand up 0.3 percent, City Development up 2.7 percent but Keppel Land falling 1.1 percent.

Broker DMG & Partners has downgraded Singapore's property sector to "neutral" due to slowing sales, massive supply and deteriorating affordability.

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