Investor sentiment was on a firmer footing early May 30 morning. Wall Street's positive overnight close as well as a decline in crude oil prices gave confidence a boost.
The latest reading on the US economy showed a degree of resilience, raising hopes that the recession could be less painful. Meanwhile, crude oil futures on the New York Mercantile Exchange slipped to about US$126 (RM409.50) per barrel, down from record high of US$135 per barrel little over a week ago.
The KL Composite Index opened in positive territory and hung on to gains till the close. Market volume also spiked higher. About 818.4 million shares changed hands Friday, the highest level recorded this month.
The increased trading volume was due, in part, to heavy trading in shares for Gamuda. The stock accounted for more than 16% of the day's total market volume. Its share price plunged nearly 18% on worries about its investments in Vietnam. The stock was the day's top loser.
Credit rating agency, Fitch Ratings, recently lowered Vietnam's sovereign rating on the back of surging inflationary concerns. The property sector, in which Gamuda has exposure, has slumped, as had the stock market and dong currency. Property values could fall further if the government is forced to raise interest rate to rein in inflation.
The benchmark KLCI ended the day sharply higher at 1,276.1 points, for a gain of more than 14 points. Leading the gainers were DiGi, KL Kepong, KNM, PPB and Genting. However, the broader market did not fare as well, reflecting persistent investor concerns over the market's outlook in the near term.
Market breadth was positive in early trading but fell into the red as the day progressed. At the close, losing stocks outnumbered gaining ones by a ratio of roughly five to four. Among the big losers were MPI, IOI Properties, Proton, Nestle, SP Setia and WCT.
Saturday, May 31, 2008
31-May-2008: 30-05-2008 (FRI) KLCI surges but broader market mixed
Friday, May 30, 2008
30-May-2008 : 29-05-2008 (THU) Market closes up on Wall Street gains
Stock prices on Bursa closed higher on May 29, helped by an overnight rebound on Wall Street and gains in regional markets, notably Japan.
Wall Street had chalked up modest gains on May 28 after generally better than expected April US durable goods orders data. Meanwhile, crude oil prices continued to gyrate, closing just above US$131 (RM425.75) per barrel, but well levels of US$135 earlier in the week.
On the domestic front, there was little reaction to Malaysia's GDP numbers for 1Q2008, which came in at 7.1%, from 7.3% in 4Q2007. The outlook going forward will be more challenging given the softening US economy and rising inflationary pressures.
Local investors still remained generally cautious, perhaps understandably so given the prevailing external and domestic uncertainties. The current earnings season hasn't yielded much surprises so far, except for the earlier strong showing by steel companies. Most results have been in line with expectations, except for the steel and plantation sectors.
The KLCI was in positive territory throughout the day, gaining as much as nine points but closing near its intra-day low instead. The index rose just 1.2 points to close at 1,261.8. Advancing stocks beat declining ones by a 7-to-5 margin at the close. Trading volume stayed thin with just 457 million shares changing hands.
The day's most actively traded stocks comprised mostly blue chips such as Maybank, TM, Gamuda, Genting, Resorts, YTL Power and IOI Corp. There was interest in Selangor water-related stocks on earlier news reports that the Selangor government may look at acquiring water-related companies that operate in the state.
Major gainers on May 29 include PPB, Panamy, KPS, Southern Steel, Digi and Sime Darby. Losers include Public Bank-foreign, MPI, Green Packet and Parkson.
Thursday, May 29, 2008
29-May-2008 : 28-05-2008 (WED) Most investors sidelined KLSE
KUALA LUMPUR: Shares on the Bursa Malaysia traded broadly lower Wednesday. Selling pressure intensified as the day progressed with the number of losing counters outstripping advancing ones. Market volume was relatively thin with most investors opting to stay on the sidelines.
Investors are likely to remain cautious given prevailing uncertainties. And with dwindling market volume, selling pressure tends to exaggerate the fall in share prices. Sentiment was not aided by similar weakness in key Asian markets Wednesday.
The sharp fall in the latest reading on US consumer confidence fuelled nervousness that the world's largest economy could be headed for a bumpier ride ahead. Although crude oil prices retreated to below US$129 (RM419.25) per barrel, prices are still some one-third higher than they were at the end of last year. Concerns like rising fuel and food prices, job security and the continued slump in the housing market are likely to give US consumers second thoughts on spending in the coming months.
The KL Composite Index was in positive territory in early trading, but quickly succumbed to selling pressure. Losses mounted as the day progressed. The benchmark index ended near its intra-day low at 1,260.6 points, for a loss of almost 14 points.
The relatively thin market volume may have exaggerated losses. Indeed, the volumes transacted on many of the top losers were not big. Total market volume contracted to just about 401 million shares, down from the average of 446 million shares in the two preceding days. The most heavily traded counters were blue chips like IOI Corp, Genting, YTL Power, Telekom Malaysia and Maybank.
Market breadth was in the red throughout the day. At the close, losing counters outstripped gaining ones by a ratio of well over two to one. KL Kepong, PPB, UMW, Shell, IOI Properties, Petronas Gas and Sime Darby were some of the biggest losers.
Wednesday, May 28, 2008
28-May-2008 : KNM New acquisitions on track for completion
Comment on result
KNM’s 1Q08 revenue and pretex profit grew 26.3% and 36.7% y-o-y, respectively led by higher capacity, increased orderbook and 1.8 ppt improvement in EBIT margin following efforts to focus on medium to high-end processing equipment that the average selling price increased to RM 15,000/MT for 1Q08, against RM 14,000/MT for 1Q07. Outlook for KNM remains promising given the oil and gas capex up-cycle. HWANG DBS maintain BUY with target price of RM 7.60 per share based on FY09 peers average PE of 15x.
28-May-2008 : 27-05-2008 (TUE) KLCI listless trading
Shares on Bursa continued to drift sideways on May 27. Trading was somewhat listless in the absence of fresh leads with most investors remaining firmly on the sidelines. Wall Street was closed for trading on May 26 and thus offered no direction to market watchers. Most of the regional stock markets ended the day higher on bargain hunting -– after having fallen for the previous few consecutive trading days. Nevertheless, the overall sentiment was still one of extreme caution. The KL Composite Index started off with small gains before selling pressure re-emerged to push it into the red. It remained in negative territory for much of the day but some buying support pared losses towards the close. The benchmark index eventually ended the day just marginally higher at 1,274.2 points. Market breadth was in the red throughout the day. At the close, the number of losing stocks outpaced gaining ones by a ratio of roughly seven to five. Tong Herr Resources was the day's biggest loser after releasing weak 1Q08 earnings results. Some of the other big losers were Dutch Lady Milk Industries, IOI Corp and Lion Industries. Among the more actively traded gainers were shares for Petronas Dagangan and Golden Plus. Investor interest was relatively weak. Market volume fell further to only about 433 million shares on May 27. This is down slightly from the 459 million shares transacted on May 26 and daily average of nearly 554 million shares last week. The rights of YTL Power warrant was the most actively traded counter. It closed at 73 sen. The rights will cease trading and holders can subscribe for the warrants at 10 sen apiece. Shares for Magnum Corp were also heavily traded ahead of the company's capital repayment exercise. The ex-offer date is fixed at May 30 for shareholders to receive RM3.45 cash per share. The stock will, subsequently, be de-listed from the local bourse.
Tuesday, May 27, 2008
27-May-2008 : KLCI drifts sideways on 26-05-2008 (MON)
KUALA LUMPUR: The KL Composite Index fluctuated within a very narrow band at the start of the new week. Most investors appear ambivalent on the outlook for the local bourse. We expect share prices will continue to drift in the near term until some clear leads emerge.
The US and key Asian markets fared poorly last week. The closely watched Dow Jones Industrial Average slipped 3.9% on the week. That weak sentiment spilled over into trading Monday. The relevant bellwether indices in Japan, Hong Kong, Singapore and Shanghai all closed sharply lower.
One of the primary concerns is record high oil price. Crude oil futures traded on the New York Mercantile Exchange briefly broke through the US$135 (RM438.75) per barrel mark at the end of last week. Although prices have since fallen back slightly, there is no indication that the retreat can be sustained.
Record high oil prices are fuelling inflationary pressures worldwide and are expected to crimp consumer spending in the coming months. That will, in turn, hurt economic growth. The extent of the impact remains elusive, at this point. Hence, investors' reluctance to take any major, fresh positions in financial markets, at least for now.
The KLCI traded within a narrow eight-point range, staying relatively flattish for the better part of the day. Confidence weakened a little in the afternoon trading session. The benchmark index ended slightly lower at 1,273.4 points. Market breadth was in the red throughout the trading day. At the close, losing stocks outnumbered gaining ones by a ratio of more than two to one.
Volume was relatively thin. As expected, many investors are staying on the sidelines in view of prevailing uncertainties. Just about 459 million shares were traded Monday. The most actively traded were the rights for YTL Power warrants. The rights will cease trading Wednesday.
Monday, May 26, 2008
26-May-2008 : US Federal Reserve Outlook
Since the US Federal Reserve began slashing interest rates in Mid August, and leading central banks around the world pumped billions of dollars into the financial system to rescue the banking industry the commodity markets have soared to record levels led by crude oil, soybeans, palm oil, wheat, gold, silver, coal, hogs,live cattle. Pension funds have plowed over 300 billion USD into commodity funds as a hedge against the collapsing US Dollar and the explosive growth of the world's money supply.
Pension funds, banks and hedge funds are driving the commodity markets.
The Australian and Canadian dollars are benefitting from this rising commodity trend as well as Man investments.
The Bernanke Fed has created a monster with its failed policy of slashing interest rates and devaluing the US Dollar driving Crude oil to USD 135 per barrel and transmitting inflation throughout the world.US Treasury chief Henry Paulson and President Bush are calling the shots on US Monitary policy
and might be secretly in favor of higher oil prices. Their chronies in the Federal reserve seem afraid to resist. This is the last rape of the American public before they lose power in the November election. Bush and his insider friends need to steal as much as they can before the game ends and they are forced out of polititical office.
The sad fact is that no one can stop them as they control the machinery of power which is the power of monitary policy and the the military. Our only hope is that the US public throws them out in November.
Bush will retire to his ranch in Texas to live in luxury for the rest of his life on the misery he has created for the mass of the public.
To protect yourself invest in high dividend paying shares, commodity related shares and those companies which can raise their prices with inflation. I have sold all REITs, construction shares for my clients and am maintaining positions in gold and Man Hedge Funds.
This should work until October 2008.
26-May-2008 : 23-05-2008(FRI) Market closes mixed, KLCI gives up early gains
KUALA LUMPUR: Stock prices on Bursa Malaysia closed mixed on Friday, despite a rebound on Wall Street as investors continued to stay cautious due to prevailing external and domestic uncertainties.
The KLCI had initially opened higher and was in positive territory throughout the day, rising nearly nine points at intra intra-day high. However, the index fell into negative territory in the final minutes of trading, ending 2.8 points lower at 1,274.8 points.
While investors took some heart from the overnight fall in crude oil prices – from a record of above US$135 to US$130.81 per barrel, oil prices are still at very high levels. There will be repercussions on global growth and inflation if crude oil prices are sustained at such high levels.
On the local front, political uncertainties are also likely to keep investors at bay, as evidenced by recent low trading volumes. Volume improved slightly from 488 million to 544 million shares. Market breadth was mixed with an even number of advancing and declining stocks.
Corporate earnings have so far been generally in line with expectations, with no major surprises. There have been no major corporate leads, apart from the earlier re-rating of steel stocks. Transmile's shares rose 12% after it announced a plan to debt-to-equity conversion with the issue of new shares to lenders. It should see more earnings in the next week.
The day's most actively traded stocks include TM, Transmile, AirAsia, Bumiputra-Commerce, Maybank and IOI Corp. Gainers include Nakamichi, BAT, DiGi, KL Kepong, Public Bank and Transmile. Losers include Petronas Dagangan, Shell, Tanjong plc and Kossan.
The market will continue to take its lead from Wall Street and the rest of corporate earnings in the coming week.
