Wednesday, December 7, 2011

KLCI extends losses at mid-morning, new listing Pavilion most active

KUALA LUMPUR (Dec 7): The FBM KLCI extended its losses at mid-morning on Wednesday as cautious sentiment kept investors on the sidelines.

Regional markets, however, mostly edged up on optimism that Standard & Poor's threat of mass credit rating downgrades will pressure European leaders to come up with a convincing framework for resolving the euro zone debt crisis at a crucial summit later this week, according to Reuters.

The FBM KLCI fell 3.90 points to 1,477.02, weighed by losses at select blue chips.

Gainers edged losers by 184 to 163, while 231 counters traded unchanged. Volume was 545.44 million shares valued at RM268.58 million.

At the regional markets, Japan's Nikkei rose 0.70% to 8,634.93, Hong Kong's Hang Seng Index gained 0.84% to 19,101.11, the Shanghai Composite Index was up 0.22% to 2,330.94, Taiwan's Taiex rose 1.11% to 7,033.64, South Korea's Kospi up 0.80% to 1,918.09 while Singapore's Straits Times Index was 0.54% higher at 2,764.19.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on Dec 7 said the FBM KLCI's resistance areas of 1,480 and 1,503 may cap market gains, whilst the obvious support areas may be located at 1,458 and 1,477.

'Despite the US markets' firm tone last night, we might not see a good day for the local index further gap filling takes place today,' he said.

Meanwhile, ECM Libra Investment Research in a strategy note on Dec 7 said it expects the FBM KLCI to trade in a range of 1,520 and 1,300 in 1H2012 before moving up towards 1,600 in 2H2012.

It said Malaysia had outperformed in 2011 and was not cheap relative to other markets.

'Hence, for better potential upside, we would be buying individual stocks that have underperformed the FBMKLCI due to negative news or developments, but could see a turnaround in their situation.

'We have identified Tenaga Nasional and Lion Industries,' it said.

Among the decliners on Bursa Malaysia, MAHB fell 21 sen to RM5.83, Proton down 18 sen to RM4.13, UMW 13 sen to RM6.54, Hong Leong Bank 12 sen to RM10.72, Lafarge Malayan Cement 11 sen to RM6.61, Tasek and Baneng fell 10 sen each to RM7.70 and 3 sen, while IJM Corp and Axis REIT fell six sen each to RM2.65 and RM2.55.

Pavilion REIT, which made its debut on the Main Market of Bursa Malaysia, was the most actively traded counter at mid-morning with 88.65 million units done. The counter added 8.5 sen to 98.5 sen.

Other actives included Sanichi, LFE Corp, MLabs, Wijaya warrants and Compugates.

Gainers at mid-morning included Nestle, Aeon, Orient, QSR, Dutch Lady, BHIC, Perstima and Genting.

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