Wednesday, January 4, 2012

KLCI remains edgy, limited gains at mid-morning

KUALA LUMPUR (Jan 4): The FBM KLCI rose at mid-morning on Wednesday in line with its regional peers, but the gains were limited as investors remained cautious given the continuing concerns over the eurozone debt crisis.

Asian stocks and the euro firmed after upbeat U.S. and European economic data boosted global shares and commodities, according to Reuters.

The FBM KLCI added 5.38 points to 1,518.92 at 10am.

Gainers led losers by 339 to 125, while 230 counters traded unchanged. Volume was 521.62 million shares valued at RM327.52 million.

At the regional markets, Japan's Nikkei 225 rose 1.32% to 8,566.95, Hong Kong's Hang Seng Index edged up 0.15% to 18,904.86, the Shanghai Composite Index added 0.77% to 2,216.39, Taiwan's Taiex was up 0.78% to 7,108.52 and Singapore's Straits Times Index rose 0.79% to 2,706.66.

Meanwhile, South Korea's Kospi shed 0.02% to 1,875.03.

RHB Research in its market update on Jan 4 said that 2012 starts with the overhanging concerns of 2H 2011, this could be another year of 'more of the same'.

However, on a brighter note, it noted the possibility of two market rallies in the near term ' 'January effect' and 'Chinese New Year rally'.

It said that while the January effect had been evident every year for the last 10 years (and had led to a positive annual return in seven of the 10 years), the historical data for the pre-Lunar New Year rally was less conclusive (but the post-festival returns have actually been negative in 7 of the last 10 years).

'Beyond January, we believe 2012 will be influenced by 2011 legacy issues.

'We thus continue to advocate a cautious stance, although we also recommend accumulating fundamentally-robust stocks on weakness for tactical plays with a longer-term view towards the recovery that will undoubtedly follow,' it said.

On Bursa Malaysia, BAT and KLK rose 44 sen each to RM49.88 and RM23.44, United PLANTATION []s 22 sen to RM19.40, Allianz 19 sen to RM4.95, YHS 16 sen to RM2.22, Batu Kawan 14 sen to RM17.64, Ajiya 12 sen to RM1.75, Jaya Tiasa 11 sen to RM7.01 while BHIC and DiGi added nine sen each to RM3.71 and RM3.90.

The actives included HWGB, Maxbiz, JCY, Envair, Karambunai and XDL, while decliners included Asdion, Tradewinds, Hibiscus, Yinson, Harrisons, Sime Darby, Kretam and Tanjung Offshore.

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