DJIA starts the day with:

12,279.99 -4.31 -0.04%

DJIA closed the day with:

12,381.02 +96.72 +0.79%

Foreign-led selling drags down KLCI

PETALING JAYA: The KL Composite Index (KLCI) lost more than 25 points yesterday, falling to 1,369.48 at the close, its lowest level in a month.

The benchmark index rebounded from a day's low of 1,354.71 but was "mirroring" the trading movement on Jan 22, when there was a market sell-off, TA Securities technical analyst Stephen Soo told StarBiz.

On Jan 22, the KLCI closed at 1,354.48 points.

According to KL-based fund managers, the market saw foreign-led selling that dragged down heavyweights Sime Darby Bhd, MISC Bhd, IOI Corp Bhd, Tenaga Nasional Bhd and MMC Corp Bhd, among others.

Gamuda Bhd, the country's second largest construction player, saw its shares fall for a second consecutive day, down 28 sen, or 6.67%, to RM3.92.

On Thursday, Gamuda founder Datuk Lin Yun Ling cut his stake in the company to 1.7% from 5.2%, causing a 15.67% daily drop in the counter.

This comes as regional property stocks also tumbled yesterday.

Construction counters IJM Corp Bhd and MMC fell three sen, or 3.97%, to RM7.25 and 26 sen, or 6.4%, to RM3.80 respectively.

Soo said: "For the next two weeks the market should be range-bound between 1,340 and 1,400 points.

"However, it depends on regional markets. If they rebound and trigger a rally, there is a possibility of the KLCI breaching the 1,400-point level in the next two weeks."

In the near term, Soo expects the index to range from 1,350 to 1,380 points.

The 1,340-point level was a very strong support level as it was a triple-bottom reached in intra-day trading in October, November and January, he added.

According to fund managers, another reason for foreign selling yesterday was the expectation for further rate cuts by the US Federal Reserve which would make borrowing costs in Malaysia less attractive compared with the United States.

Morgan Stanley Research, Asia/Pacific in a Jan 29 report said it expected Bank Negara to "keep rates on hold".

"However, if the growth slowdown surprises on the downside, we believe the central bank will tilt towards addressing growth concerns and the risk with regard to policy direction are skewed towards easing, particularly given that the Fed is likely to bring the target rate down further than we previously expected to 2.5%," the report said.

Regional markets were down yesterday on US recession fears as the Dow Jones Industrial Average fell more than 140 points in overnight trading to 12,284 due to weak manufacturing report from the Philadelphia Federal Reserve Bank.

Bloomberg reported that the Federal Reserve Bank of Philadelphia's general economic index fell more than forecast this month to -24, showing the margin by which more firms reported a decrease in activity instead of an increase.

Meanwhile, despite talk of foreign selling, the ringgit closed at a new high of 3.21 against the US dollar as Asian currencies rose on speculation that central banks in the region would allow currency advances to curb inflation.

The ringgit yesterday weakened against the euro and pound sterling at 2.7709/7742 and 6.3256/3311 respectively.

URL: http://biz.thestar.com.my/news/story.asp?f...83&sec=business

DJIA starts the day with:

12,408.13 +27.11 +0.22%

IOI Properties proposes share split

KUALA LUMPUR: IOI Properties Bhd has proposed a one-for-two share split and to undertake a renounceable rights issue of up to 169.53 million new shares.

The implementation of the rights issue was based on one rights share for every four shares held after the proposed share split, at an issue price of RM5.50 per share, it told Bursa Malaysia.

The company would also amend the memorandum and articles of association to facilitate the proposed share split.

"The proposed rights issue will raise funds to refinance bank borrowings utilised or to be utilised, to part-fund the proposed acquisition of a 5.3-acre site at Singapore's Sentosa Cove and the working capital purposes of the company," it said in a statement on Tuesday.

The company expects the proposals to be completed by the first quarter of financial year ending June 30, 2009.

URL: http://biz.thestar.com.my/news/story.asp?f...00&sec=business

DJIA starts the day with:

12,539.60 -30.62 -0.24%

DJIA closed the day with:

12,684.92 +114.70 +0.91%

DJIA starts the day with:

12,619.96 -64.96 -0.51%

DJIA closed the day with:

12,694.28 +9.36 +0.07%

DJIA lost 300 points to close at:

12,266.39 -315.79 -2.51%

KLCI in bearish zone

MAIN BOARD

THE KL Composite Index (KLCI) ended moderately lower on continued selling and weakness in most of the main index-linked stocks and settled at a 15-week low.

The KLCI initially edged higher in early trading and struggled for most of the sessions and finally lost its bottom influenced by late declines in the US and Asian markets.

The index fell from a week's high of 1,382.90 to a low of 1,354.79 points and settled the week moderately lower at 1,357.40, down 12.08 points or 0.88% from the week before.

Most of the top 10 index-linked stocks closed the week in the negative territory.

Maybank, Sime Darby, Telekom, Public Bank, Genting, MISC, Petronas Gas, DiGi.Com and Plus Expressways finished sharply lower and removed a combined 19.17 points from the KLCI.

Volume for the week fell slightly to 1.222 billion from 1.261 billion shares a week earlier.

The daily average volume declined to 224.5 million from 252.2 million shares.

The candlestick chart closed the week on a bearish note. There were five black candles in the past five days, and the steady downward pattern is considered negative for the short-term trend.

We have seen some downward pressure in the past two weeks, and this negative development is expected to continue.

The daily candlestick chart is indicating an immediate overhead barrier at the 1,360-1,370 levels.

A vital chart support now stands at 1,350-1,330. In the event of a successful break below these support levels, the index is expected to trend lower and test its six-month lows at about 1,300-1,280.

The daily technical indicators remained neutral to slightly negative at Friday's close and called for further downward selling pressure this week.

The daily stochastic triggered the buy signal on Feb 26 and managed to remain slightly positive for the immediate-term trend at Friday's close. The oscillators per cent K and D ended higher and out of the bearish extended-move zones at 30.75% and 29.59% respectively.

The daily Money Flow Index (MFI) recovered marginally and closed higher at 37.82 points. Analysis of the MFI indicates moderate accumulation occurred last week.

The main trend-tracker, the 3- and 7-week exponentially smoothed moving-average price lines (ESA-lines), expanded its negative divergence on Friday and showed the main trend would stay bearish for the immediate term.

The short-term trend-tracker, the 3- and 7-day ESA-lines, settled the week in bearish divergence and suggested the index would come under more bearish pressure this week.

The 5-day Relative Strength Index (RSI) settled the week lower near the oversold zones at 20.72 points. Analysis of the RSI shows the index is slightly oversold.

URL: http://biz.thestar.com.my/news/story.asp?f...33&sec=business

DJIA starts the day with:

12,242.37 -24.02 -0.20%

CPO rally fails to halt KLCI slide

PETALING JAYA: The relentless rally in crude palm oil (CPO) price yesterday failed to lend support to Bursa Malaysia-listed stocks, with the KL Composite Index (KLCI) sliding nearly 2% in tandem with the sharp losses in the regional bourses.

The KLCI sank 26.8 points to 1,330.6 points - a new low since the start of 2008 - as the stale bulls locked in whatever profits left in their portfolios.

"Sentiment has turned cautious amid growing concerns over the US economy. No one wants to catch the falling knife now," UOB-OSK Asset Management Sdn Bhd chief executive officer Lim Suet Ling said.

Lim said most institutional investors, including foreign fund managers, were staying on the sidelines for the dust to settle before taking any fresh positions.

Among the worst hit regional markets were Tokyo, Hong Kong and Singapore.

The Nikkei 225 tumbled 610.8 points, or 4.5%, to 12,992.2, the Hang Seng Index plunged 746.7 points, or 3%, to 23,584.9 while the Straits Times Index slipped nearly 100 points, or 3.3%, to 2,926.5.

Lim said the key regional markets of Hong Kong and Singapore were trading at a slight discount to Malaysia; hence, foreign money tended to flow to these markets.

Nonetheless, Malaysia's diversified economy and the strong commodity prices would appeal to investors after a healthy consolidation in the local bourse, she added.

Dealers said the upcoming general election had somewhat deterred buying interest in the local bourse ahead of polling day on Saturday, given that the likelihood of a landslide victory for the ruling party was not high.

The three-month CPO futures contracts shot up RM325 to a fresh high of RM4,330 per tonne. The climb in price of the commodity, however, did not spill over to the plantation stocks.

Sime Darby Bhd skidded 50 sen to RM11.10, IOI Corp Bhd lost 20 sen to RM7.85 while KL Kepong Bhd was unchanged at RM11.80.

Other heavyweights also fell, with Genting Bhd down 25 sen to RM6.60, the lowest since March last year; Malayan Banking Bhd shed 15 sen to a five-month low of RM8.95 and Public Bank Bhd lost 20 sen to RM10.30.

Last Friday, the US Commerce Department said US consumer spending, the key economic driver, rose 0.4% in January. However, there was stagnant growth for the second consecutive month after adjustment for inflation.

"The latest numbers confirmed the view that many Americans have tightened their belt as a result of the drop in job creation, which has affected consumer confidence," said an economist.

"And worse is inflation, which is also taking a toll on consumer spending," he added.

Rising inflation, which has exceeded the US Federal Reserve's comfort zone of 1% to 2%, has compounded the economic problems caused by the sub-prime mortgage crisis.

"The problem now is no one actually knows how bad the US subprime (crisis) is as more financial groups are making hefty provisions, plus the slew of weak economic data," said a head of equity research.

URL: http://biz.thestar.com.my/news/story.asp?f...08&sec=business

Asian markets slide at midday

KUALA LUMPUR: Asian markets including Bursa Malaysia extended their losses for the second day this week, as investors continued to stay on the sidelines on nagging concerns about a weakening US economy and surging oil prices.

Plantation stocks were among the major losers, tracking the losses on the crude palm oil (CPO) futures, which plunged 5.8% after hitting a record high on worries that China might cap vegetable oil prices.

At 12.30pm, the KLCI was down 10.24 points or 0.77% to 1,320.37, the FBM Emas lost points 81.98 points to 8,951.06 and the FBM Second Board fell 67.84 points to 6,102.58.

Turnover was 293.90 million shares valued at RM779 million. There were 159 gainers, 440 losers while 230 counters were unchanged.

Among Asian markets, Hong Kong's Hang Seng Index fell 155.89 points or 0.66% to 23,429.09, Japan's Nikkei 225 lost 0.21% to 12,964.45, South Korea's Kospi lost 0.14% to 1,669.39 and Singapore's Straits Times Index 0.36% lower at 2,915.89.

Light crude oil was trading above the US$100 per barrel. However, United Arab Emirates Oil Minister Mohammed al-Hamli said the oil market was "adequately supplied".

According to a Reuters report, he said in Seoul that the high crude oil prices, he said was due to the weakness of the US dollar, geopolitical issued and some bottlenecks in the refinery sector.

At Bursa Malaysia, analysts said the market was undergoing attrition and advised investors to stay defensive and away from the market if the 1,320 level was breached.

They said with the run-up to polling day and also ahead of the FOMC meeting next week, investors were staying out of the market.

The major losers were BAT, sliding 75 sen to RM43.25 while DiGi.com gacve ip 50 sen to RM23. Knusford plunged 46 sen to RM1.30 but in thin volume.

Heavyweights BCHB fell 30 sen to RM10.10 and Tenaga 25 sen to RM8.70. Maybank lost five sen to RM8.90. However, Telekom rose 10 sen to RM11.30.

Kuala Lumpur Kepong gave up 20 sen to RM18.30, Asiatic 20 sen to RM8.80 and Glenealy 15 sen to RM5.20. Sime Darby lost 10 sen to RM11. However, Kwantas added 12 sen to RM4.98.

However, timber based Ta Ann jumped 30 sen to RM6.80 in active trade while wtk ADDED EIGHT SEN TO rm2.35. Other gainers were KNM, which added 15 sen to RM6.25 on its acquisition of German process equipment manufacturer Borsig for RM1.7 billion.

RHB Capital advanced eight sen to RM4.98 after the Finance Ministry gave Abu Dhabi Commercial Bank PJSC the approval to acquire a 25% stake in the banking group from the Employees Provident Fund.

URL: http://biz.thestar.com.my/news/story.asp?f...34&sec=business

KLCI extends losses in early trade

BLUE chips extended their losses in early trade on March 4, dragged down by losses in heavyweights including BCHB, MISC and Tenaga in absence of strong leads to attract fresh buying interest.

At 10am, the KLCI was down 6.31 points or 0.47% to 1,324.3 in thin trade. Declining stocks beat advancers 237 to 123.

Asian markets fared better, despite the uninspiring close on Wall Street where the Dow Jones Industrial Average ended 7.49 points or 0.06% lower to 12,258.9.

Japan's Nikkei 225 rose 0.75% to 13,089.34, South Korea's Kospi added 0.25% to 1,675.97 while Singapore's Straits Times Index advanced 0.36% to 2,937.19.

At Bursa Malaysia, BAT led the losers' list, falling 50 sen to RM43.50. BCHB lost 30 sen to RM10.10, Gamuda fell 16 sen to RM3.66 while heavyweights MISC and Tenaga lost 15 sen each to RM8.60 and RM8.80.

However, KNM bucked the cautious market sentiment, rising 15 sen to RM6.25 after it announced it was acquiring German process equipment specialist Borsig for RM1.7 billion in a cash deal.

URL: http://biz.thestar.com.my/news/story.asp?f...43&sec=business

Genting still an attractive bet

PETALING JAYA: Genting Bhd's current share price weakness represents an investment opportunity, said OSK Investment Bank, which is maintaining a "buy" call on the stock with a target price of RM10.55.

This is given the group's undemanding valuation compared with that of its global casino peers, it added.

"We see an opportunity to take advantage of the current share price weakness, as the group's fundamentals and future prospects remain intact," OSK said in a note yesterday.

Backed by higher income from the leisure and hospitality, plantation and power divisions, Genting posted a 26% jump in pre-tax profit to RM3.39bil for the year ended Dec 31, 2007 (FY07).

There were also one-off gains of RM1.1bil from the dilution of shareholding in Resorts World Bhd, Genting International Plc and Star Cruises Ltd (SCL) and RM337.1mil from a gain on disposal of investment in SCL.

On the leisure and hospitality division, OSK said casino patronage grew stronger than overall visitor arrivals, which led to significant growth in both VIP and grind revenue in excess of 30% and 10% respectively.

The group, it said, planned to sustain the growth momentum of its leisure and hospitality business by introducing more non-casino entertainment activities, including concerts; rolling out more electronic gaming machines; and offering cheaper hotel room packages.

OSK said the management would actively search for gaming acquisition opportunities in the region as it believed Resorts World should not confine itself to domestic operations.

It said companies that made excessive leverage during the period of low interest rates in the US from 2001 to 2003 might now come under tremendous pressure to de-leverage their balance sheet.

"This is especially so for casino property acquisitions by highly leveraged non-casino companies, which may now be plagued with rising interest costs and under-managed casino properties.

"Resorts World, with its cash-rich balance sheet and robust free cash flow generation, is well positioned to capitalise on such opportunities," the investment bank said.

Meanwhile, OSK said Genting's plantation division was a star performer, contributing 55.4% of the group's FY07 pre-tax profit.

Asiatic Development Bhd posted higher pre-tax profit and revenue for the fourth quarter ended Dec 31, 2007 on the back of higher crude palm oil (CPO) prices, which averaged RM2,888 a tonne during the quarter and RM2,500 per tonne for FY07.

"Going forward, the management plans to lock in a greater portion of sales as the current forward CPO price of above RM3,200 per tonne is very attractive," it said.

OSK also noted that there were promising developments at Genting's three Indonesian oil fields at Anambas, North West Natuna and West Salawati, all of which are currently at the exploration stage.

Furthermore, 95%-owned Genting Oil and Gas Ltd is anticipated to see the generation of cash flow from the Indonesian Muturi production-sharing contract late this year.

OSK said when the unit sold its 45% stake in Muturi to BP Global Investments Ltd in 2001, it had retained long-term rights to a deferred share of future pre-tax monthly income from the production-sharing contract.

"We believe that contribution from the oil and gas (O&G) division could potentially rise by more than five-fold to RM212mil by FY2009/2010 as production in Muturi increases," it said.

URL: http://biz.thestar.com.my/news/story.asp?f...64&sec=business

This post has been edited by David83: Mar 4 2008, 06:48 PM

DJIA starts the day with:

12,164.06 -94.84 -0.77%

DJIA closed the day with:

12,213.80 -45.10 -0.37%

KLCI hits 5mth low of 1,285 at midday

KUALA LUMPUR: The KLCI fell 2.2% to a five-month low of 1,285 at midday Wednesday, dragged down by losses in plantation stocks as crude palm oil (CPO) prices retreated, and also on some foreign selling of index-linked stocks and heavyweights.

At 12.30pm, the KLCI had fallen 28.96 points to 1,285.06, the FBM Emas Index lost 196.8 points to 8,723.77 and the FBM Second Board lost 119.09 points to 5,986.38.

Turnover was 401 million shares valued at RM1.02bil. Decliners hammered advancers 650 to 67 while 177 counters were unchanged.

Among Asian markets, Shanghai's A Share Index was the second worst performers, skidding 2.15% to 4,450.98. Reuters said the market was dragged down by heavy industrial shares as shareholders in Pin An Insurance met to vote on its proposal to make it one of the world's largest equity issues.

Hong Kong's Hang Seng Index fell 1% to 22,888.9, Singapore's Straits Times Index fell 0.55% to 2,903.64 and Japan's Nikkei 225 0.24% lower to 12,961.18.

On the performance of Bursa Malaysia, analysts said there was some foreign selling of key stocks, including plantation stocks, which had performed well, riding on the surge in CPO prices. CPO futures prices fell as much as RM171 to RM3,928 per tonne, off the record high of RM4,486 earlier this week.

Analysts said while the companies' fundamentals were still intact, however market sentiment had taken a beating on the continued selling of blue chips. The sell-down had triggered some programme selling.

KLK was the top loser, skidding RM1.60 to RM16.60 while Batu Kawan lost 60 sen to RM10.50 and United Plantations 50 sen to RM13.80; IOI Corp fell 30 sen to RM7.50. Sime Darby fell 20 sen to RM10.90. Chin Teck fell 25 sen to RMRM7.65 and IJM Plantations was 24 sen lower at RM3.88.

However, LPF rose eight sen to RM3.88 after KLK agreed to buy36.52 million LPF shares from Glamour Green at RM4.20 apiece.

Among the heavyweights, Tenaga hit a 52-week low of RM8.60, down five sen. Maybank fell 25 sen to RM8.55 while Telekom lost 20 sen to RM10.90.

Other major losers were Bursa, down 50 sen to RM9.90, IJM 40 sen to RM6.75 and DiGi 30 sen to RM22.50.

Among the major gainers were Ranhill Utilities, up 11 sen to RM2.88 while MSC added 10 sen to RM7.60 amd Ta Ann five sen to RM6.75.

URL: http://biz.thestar.com.my/news/story.asp?f...49&sec=business

KLCI down 21 pts on foreign selling

KUALA LUMPUR: Blue chips fell in early trade, with the KLCI falling below the 1,300-level on some foreign selling of key stocks while smaller investors were also facing margin calls after several days of selling.

At 10am, the KLCI was down 21.01 points or 1.6% to 1,293.01. Turnover was 114 million shares valued at RM270 million.

Losers hammered gainers 412 to 53.

However, Asian markets fared better despite some mild signs of selling, with Japan's Nikkei 225 down 0.22% to 12,964.21 and Singapore's Straits Times Index down 0.03% to 2,918.79.

Wall Street closed lower, with the Dow Jones Industrial Average down 0.37% to 12,213.8.

Analysts said market sentiment was cautious after the continuous selling on Bursa and foreign research houses recommending an underweight on emerging markets.

They added retail investors were also facing margin calls.

KLK was the top loser, sliding RM1 to RM17.20, DiGi lost 30 sen to RM22.50, Bursa fell 30 sen to RM10.10.

KNM and UMW lost 25 sen each to RM5.80 and RM6.50 respectively. Sime Darby lost 20 sen to RM10.90, which is below its listing price of RM11.20 last year.

URL: http://biz.thestar.com.my/news/story.asp?f...56&sec=business