Thursday, February 17, 2011

FBM KLCI extends gains at mid-morning

KUALA LUMPUR: The FBM KLCI extended its gains at mid-morning on Thursday, Feb 16, lifted by gains at key blue chips including banking stocks after the firmer overnight close at Wall Street.

Regional markets were mixed, with investors remaining cautious as they weighed further economic data emerging in the region.

Singapore on Thursday revised downwards fourth quarter GDP growth estimates and warned that inflation will be higher than earlier forecast, according to Reuters.

Meanwhile, China drew US$10 billion in foreign direct investment (FDI) in January, 23.4% more than in the same period of 2010, said Reuters.

The FBM KLCI rose 3.44 points to 1,509.74.

Gainers led losers by 251 to 189, while 258 counters traded unchanged. Volume was 391.36 million shares valued at RM227.38 millon.

At the regional markets, Japan's Nikkei 225 rose 0.38% to 10,849.57 and Hong Kong's Hang Seng Index opened 0.1% higher at 23,178.09.

South Korea's Kospi fell 0.56% to 1,977.88, Singapore's Straits Times Index lost 0.43% to 3,081.50, Taiwan's Taiex was down 0.19% to 8,696.68 while the Shanghai Composite Index shed 0.03% to 2,923.10.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on Feb 17 said he anticipates the index to remain volatile in the short term and bearish in the medium term.

As a result, very short-term trading was the key to the markets, he said.

'We suggest clients liquidate on rallies and remain more in cash (or in price defensive counters). Heavy foreign selling in the Asia-Pacific region and in Malaysia could be the next obvious major investment move on any significant regional rebound.

'Due to the higher US markets last night, we may see the FBM KLCI in a rebound posture today,' he said.

Meanwhile, BIMB Securities Research said the encouraging corporate earnings results, M&A activity and more importantly due to favourable economic reports lifted Wall Street yesterday.

Added to that, the Federal Reserves reported that factories in US produced more goods last month although the overall IPI fell, it said.

'These goods news were however weighed down by the rising wholesale prices in the country no thanks to the jump in gas prices and other related goods. Above all, the weakening of JPY against the USD will be a boon for stock market performance today.

'Expect the local market to trade in positive momentum as a result. JPY closed at 83.61 Yen per Dollar yesterday against the 52-week high of 80.40 Yen per Dollar, suggesting that Japan export market may recover soon,' it said in a note Feb 17.

On Bursa Malaysia, CIMB added eight sen to RM8.18, Public Bank and Maybank up two sen each to RM13.02 and RM8.49, Axiata nine sen to RM5.08 and Genting gained eight sen to RM10.26.

MTD Capital was up 20 sen to RM11.20, Hartalega 18 sen to RM6.08, Cycle & Carriage 14 sen to RM4.92, Scientex 12 sen to RM2.53, Mamee 11 sen to RM3.80 while Mudajaya, MMHE, KLK and Kulim added 10 sen each to RM5.01, RM6.54, RM21.96 and RM14.48.

Losers included SHL, HPI, C.I.Holdings, IOI Corp, Lafarge Malayan Cement and Uzma.

Actives'' included Scomi, Petra, Focus Point, Nextnation'' and Ho Wah Genting.

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