Tuesday, November 23, 2010

Korean conflict, Ireland woes drive KLCI to one-month low

KUALA LUMPUR: November is turning out to be a volatile month for equities, with the FBM KLCI falling to more than a month's low on Tuesday, Nov 23, as sentiment takes a hit from the Korean conflict and Ireland's financial woes.

At Bursa Malaysia, the FBM KLCI closed down 15.67 points or 1.04% to 1,487.53 ' the lowest since Oct 21. Declining stocks thrashed advancers 784 to 96 while 196 counters were unchanged. Turnover was 1.18 billion shares valued at RM2 billion.

Key Asian markets fell between 1% and 2.67% while European markets opened weaker.

Reuters reported shares in Hong Kong and China fell on Tuesday as a stronger dollar prompted investors to dump metals and mining stocks, while Hong Kong developers extended losses on fears that new property curbs will slash earnings.

Investors, already edgy over Beijing's fight against inflation and Europe's debt crisis, were also rattled by news late in the session that North Korea had shelled a South Korean island, prompting a return of fire by the South.

The attack, the biggest by the North in years, sent investors fleeing to the safety of the U.S. dollar, further weighing on commodities prices and shares of resource companies.

The Hang Seng Index fell 2.67% to 22,896.14, CSI 300 Index 2.04% lower at 3,107.18, Shanghai Composite 2.04% to 2,828.28 while the Singapore Straits Times Index shed 1.87% to 3,131.32. South Korea's Kospi fell 0.79% to 1,928.94 before trading was halted due to the conflict.

At Bursa Malaysia, Kulim fell 76 sen to RM11.90, making the worst performer.'' RHB Research Institute said Kulim, which owns 57% of QSR Brands, may not accept Tan Sri Halim Saad's offer price for the entire business and undertakings of QSR at RM5.60 per share, which would translate to a total of RM1.6 billion.

The research house said on the offer price of RM5.60 per share undervalued both KFCH and QSR shares.

'Although we do not cover QSR, we believe that the offer price for QSR should at least be close to our estimated fair value of RM6.47, which is based on our fair value for KFCH of RM3.85 and the estimated RM306 million value for Pizza Hut,' it said.

United PLANTATION []s lost 40 sen to RM17.30, DiGi and HL Bank 38 sen each to RM24.42 and RM9.14 while Boustead lost 26 sen to RM5.21. PPB fell 36 sen to RM18.44 on lower earnings from its associate Wilmar.

Among the index-linked stocks Maybank fell 14 sen to RM8.79, CIMB 10 sen to RM8.31, Sime 12 sen to RM8.70 and Tenaga 16 sen to RM8.51.

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