Friday, August 27, 2010

FBM KLCI claws back into the black

KUALA LUMPUR: The FBM KLCI reversed its losses and clawed back into positive territory at the mid-day break on Friday, Aug 27, lifted by gains including at Sime Darby, Public Bank, Maybank, Tenaga and UMW.

At 12.30pm, the benchmark index was 0.99 of a point higher at 1,408.99. Volume was 360.22 million shares valued at RM657.77 million.

However, trading was cautious with losers outpacing gainers by 364 to 204, while 260 counters traded unchanged.

RHB Research Institute in a note Aug 27 said Thursday's sudden reversal took it by surprise as it had reduced the possibility of triggering a technical correction on the short-term uptrend of the FBM KLCI.

With the huge positive candle registered on the board plus a record of a fresh 30-month high for the index suggest a possible resumption of its previous bullish momentum, it said.

However, given the mixed momentum readings and the poorer daily turnover (below the 800 million-one billion shares mark), the research house said it preferred'' to wait for more signs of confirmation signals today before jumping on the bandwagon for an extended rally on the FBM KLCI in sessions ahead.

The next upside target is at 1,450, it said.

Should the selling resume on Friday, forcing the index to fall to below 1,400 again, it will restore the corrective mode and press the index to the short-term correction trigger point near 1,390 and the 10-day SMA again.

Further support is seen at 1,350, near the 40-day SMA of 1,354, said the research house.

"In our view, investors are likely to wait for the second reading of the US 2Q GDP and a key speech by the Federal Reserve chairman Ben Bernanke tonight, before deciding their next course of action next week," it said.

On Bursa Malaysia, Sime Darby was among the major gainers and rose 15 sen to RM8.03 after several research houses, including OSK Research, raised their respective target prices and calls on the stock.

OSK Researrch said Sime Darby's 4QFY10 results continued to suffer as it had expected from provisions for the Energy & Utilities (E&U) division although this was at a smaller quantum.

"Measures put in place by the new CEO to drive performance going forward should bring cheer to investors.

"We have raised our target PE from 15 times to 18 times to reflect the optimism that Sime is past its darkest hour. Our target price is raised from RM6.74 to RM8.09. Upgrade Sime darby from Sell to Neutral," it said in a note on Friday.

Other major gainers were Public Bank that added 12 sen to RM12.14, Maybank, Tenaga and UMW up five sen each to RM8.27, RM8.80 and RM6.55, respectively, while BAT was up 26 sen to RM45.10.

Lay Hong gained 18 sen to RM2.11, Padini was up 15 sen to RM4.23, Nestle added 12 sen to RM39.60 while Huat Lai rose 10 sen to RM1.35.

Among the major decliners, CIMB fell 20 sen to RM7.70, Cycle & Carriage down 14 sen to RM5.24, Ralco fell 10.5 sen to 76 sen, PacificMas down 10 sen to RM4.60, Goldis and JT International fell nine sen each to RM1.40 and RM5.80, while Petronas Dagangan lost eight sen to RM10.42.

Timecom was the most actively traded stock Friday morning with 31.9 million shares done. The counter slipped 1.5 sen to 49.5 sen. Other actives included Carotech, Silver Bird Group, Maybank, Axiata, CIMB and Sime Darby.

At the regional markets, Japan's Nikkei 225 erased its earlier losses and rose 0.34% to 8,936.90, Taiwan's Taiex added 0.13% to 7,699.57 and Singapore's Straits Times Index was up 0.51% to 2,940.90.

The Shanghai Composite Index fell 0.34% to 2,594.75, South Korea's Kospi Index was down 0.12% to 1,727.60 and Hong Kong's Hang Seng Index shed 0.08% to 20,594.89.

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