Tuesday, May 3, 2011

Market starts off May in the red, DiGi top loser

KUALA LUMPUR: The Malaysian stock market started off the first day of trade in May on a cautious note on Tuesday, May 3 with DiGi the top loser after analysts lowered their outlook for the telco.

At 12.30pm, the FBM KLCI was down 3.62 points to 1,531.33. Turnover was 518.80 million shares valued at RM496.37 million. Losers beat gainers 445 to 191 while 265 stocks were unchanged.

Among key regional markets, Hong Kong's Hang Seng Index rose 0.18% to 23,754.60 while South Korea's Kospi fell 1.59% to 2,193.59 and Singapore's Straits Times Index shed 0.74% to 3,156.36.

The ringgit was weaker against the US dollar at 2.9700 when compared with the previous close of 2.9630.'' US light crude oil fell 59 cents to US$112.93 per barrel while the crude palm oil third month rose RM19 to RM3,275 per tonne.

At Bursa Malaysia, investors were cautious, taking their cue from the mixed regional markets following the latest political developments after Osama bin Laden's death.

Hwang DBS Vickers Research (HDBSVR) said in its market outlook that although the market's flattish performance may still persist, initial signs indicated the Malaysian bourse could show a gradual uptrend going forward.

'A market recovery would likely be in progress if the FBM KLCI quickly pulls away ' the farther the better ' from 1,530 and glide towards 1,550,' it said.

HDBSVR said the key market barometer inched up every day except last Friday to close at 1,534.95, a cumulative increase of 12.2 points or 0.8% for the week.

'After reading the US Federal Open Market Committee statement last week ' which in summary said that the federal funds rate would be kept low for an extended period and the quantitative easing programme to purchase US$600 billion of longer-term Treasury securities would be completed end-June as per the original deadline ' we should see added interest in Bank Negara Malaysia's monetary policy committee meeting to be held on Thursday,' it said.

DiGi was the top loser. AmResearch reaffirmed its HOLD on the telco with a maintained fair value of RM27.35 a share, based on a discounted cashflow valuation method.

Petronas Dagangan fell 32 sen to RM15.16, MISC 26 sen to RM7.54 and BAT 20 sen to RM47.80 and Dutch Lady 18 sen to RM17.10 and KL Kepong 12 sen to RM21.

SAAG was the most active with 28.28 million shares done, down 0.5 sen to nine sen after it reported wider losses in its audited results for FY ended Dec 31, 2010.

Sumatec plunged 11 sen to 14 sen with 23.14 million shares done after it was classified a PN17 company while the warrants lost 7.5 sen to seven sen.

HWGB fell 4.5 sen to 62.5 sen with 18.28 million shares after CIMB Equities Research had a technical Sell call on the shares. 'Our strategy here is to unload on strength, preferably near the 70 sen to 72 sen resistances,' it said. HWGB-WB fell 5.5 sen to 55 sen.

F&N was the top gainer, up 62 sen to RM18.32, Nestle 40 sen to RM48.38 and GAB 14 sen to RM10.24.

EON Cap rose 21 sen to RM7.44 after its board had on April 28 confirmed that it would accept Hong Leong Bank's offer of RM5.06bil or RM7.30 per EON Cap share. Analysts expected that the net dividend of RM311.9 million, which EON Bank would pay to EON Cap, might be given out to EON Cap shareholders.

AirAsia rose 11 sen to RM2.98. OSK Research said the low-cost carrier's announcement of its symbolic maiden dividend and the imposition of a fuel surcharge starting this month (which will lift FY11 earnings by 4.15%) coupled with its encouraging 1Q traffic numbers should bring AirAsia back into the limelight of investors.

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