Friday, November 18, 2011

KLCI falls for the fourth day as regional markets slide

KUALA LUMPUR (Nov 18): The FBM KLCI extended its losses for the fourth day running on Friday, Nov 18, in line with the slump at key regional markets following the sharp overnight fall at Wall Street.

Asian shares fell for a fourth day in a row and the dollar firmed on Friday as Europe's funding difficulties intensified, with Spanish borrowing costs hitting an unsustainable level and premiums for dollar funds rising further, according to Reuters.

In a sign global funding strains may spread to Asia, benchmark three-month euroyen interest rates futures fell to an eight-month low on Friday on concerns that tightness in dollar money markets may prompt non-Japanese banks to raise yen at a higher rate, it said.

The FBM KLCI fell 1.67 points to 1,463.80 at mid-morning, weighed by losses at select blue chips.

Losers edged gainers by 266 to 135, while 190 counters traded unchanged. Volume was 374.82 million shares valued at RM186.88 million.

At the regional markets, South Korea's Kospi slumped 2.25% to 1,834.50, Hong Kong's Hang Seng Index lost 1.91% to 18,457.43, Taiwan's Taiex fell 1.48% to 7,278.12, Japan's Nikkei 225 lost 1.29% to 8,370.12, Singapore's Straits Times Index was down 1.10% to 2,747.68 while the Shanghai Composite Index shed 0.81% to 2,443.14.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to on Nov 18 clients said that due to US markets' very poor tone last night, there could be another downward day for the local index.

He advised investors to trade with a short-term time frame locally, adding that profit-taking and liquidation would take place ahead of the weekend.

'It is unwise to join the recent penny stock activity (eg Harvest with its suspension, designation and limit-down and SYF with its large cumulative 2 days' price and percentage drop) as these stocks do not have any fundamentals and the companies are loss-making.

'Sell these stocks swiftly if their trends turn down violently,' he said.

Among the decliners at mid-morning, PPB fell 18 sen to RM16.62, HLFG lost 14 sen to RM11.42, Public Bank 10 sen to RM12.58, KYM, Hong Leong Bank and TDM eight sen each to RM1.66, RM10.48 and RM3.28, UMW seven sen to RM6.53 while CBIP and Petronas Chemicals fell six sen each to RM3.90 and RM6.19.

Compugates was the most actively traded counter with 30.8 million shares done. The stock was unchanged at 8 sen.

Other actives included Frontken, Envair, DPS Resources, SAAG, Fastrak, Extol and SYF Resources.

Gainers at mid-morning included BAT, Fima Corp, DiGi, TSH Resources, MAHB, Proton, Harvest Court and GAB.

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