Friday, August 26, 2011

KLCI down at mid-morning, CIMB weighs

KUALA LUMPUR: The FBM KLCI extended its losses on Friday, Aug 26 in line with the tepid sentiment at key regional markets following the weaker overnight close at Wall Street, as well the holiday-shortened trading week ahead.

Yesterday, a sharp sell-off in the DAX impacted US stocks and risk assets broadly ahead of the Kansas City Fed's Jackson Hole symposium.

The DAX fell 4% over a 15 minute period during the European afternoon and the exact cause of the decline is still unknown.

Fed chief Ben Bernanke is due to address central bankers at an annual symposium in Jackson Hole, Wyoming, on Friday. His speech last year laid the groundwork for the Fed's US$600 billion bond-buying program, to revive the US economy.

The FBM KLCI fell 12.10 points to 1,452.64 at 10am, weighed by losses at key blue chips including CIMB, Axiata, RHB Capital and Genting.

Losers led gainers by 312 to 85 while 154 counters traded unchanged. Volume was 130.63 million share valued at RM294.27 million.

At the regional markets, Japan's Nikkei 225 shed 0.07% to 8,766.54, Hong Kong's Hang Seng Index fell 0.24% to 19,705.68, the Shanghai Composite Index lost 0.38% to 2,605.25 and Singapore's Straits Times Index fell 0.81% to 2,743.33.

Meanwhile, Taiwan's Taiex added 0.38% to 7,439.36 and South Korea's Kospi gained 0.12% to 1,766.63.

Strategists at the Royal Bank of Scotland said they did not think that there was much that Bernanke could say or do, especially after the latest FOMC statement and the mid-2013 anchor for "lower for longer."

'The inflation backdrop is different now and despite the Fed's best efforts, one measure of the money multiplier shows that all the Fed's liquidity is not really spreading through the system as they had hoped,' they said in a note Aug 26.

BIMB Securities Research in a note Aug 26 said that after three days of gains on Wall Street, investors were spooked by rumours that the 'trigger happy' rating agencies may look to downgrade some European countries over the debt situation that remains very much prevalent and use it as an excuse to take profit pushing the Dow Jones Index down 171 points.

Volatility should take centre stage today for regional bourses as investors may look to sell with an eye on Bernanke's address today, it said.

'Despite the stronger regional performance yesterday, the FBM KLCI went south attributed mainly to the selling on CIMB which on its own had contributed a six point decline to the benchmark index.

'We believe investors would remain sidelined for today ahead of a lengthy break next week and expect some selling to persist. Next support is seen at the 1,460 mark,' it said.

On Bursa Malaysia, CIMB was the most actively traded counter with 17.77 million shares done. The stock fell 20 sen to RM7.05.

Other actives included Axiata, Eden, Bumi Armada, Trinity, AirAsia, MUI and Karambunai.

Among the losers, RHB Capital fell 21 sen to RM8.11, Allianz 19 sen to RM4.56, QSR and Bumi Armada 15 sen each to RM5.71 and RM3.65, Batu Kawan and HLFG 14 sen each to RM15.56 and RM12, while Genting lost 13 sen to RM9.65.

Gainers included DiGi, MISC, Kretam, Panasonic, Nilai and United Malacca.



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