KL shares to open easier

KUALA LUMPUR: Malaysian shares are set for an easier opening after U.S. stocks were dragged lower by weak data and worries that the government’s economic plans would limit profits.

The main Wall Street indexes fell up to 2.4 percent as investors viewed President Barack Obama’s plan to expand healthcare provision and cut costs as likely to strangle earnings in the sector.

Malaysia’s benchmark stock index $<.KLSE$> ended 0.34 percent lower at 893.42 points on Thursday. “The weak trend is likely to persist as we approach the weekend,” said an institutional dealer at a local investment bank.

Traders will stay sidelined ahead of the central bank’s assessment of Malaysia’s economic performance in the fourth quarter later this evening. The country’s economy is seen growing just 1 percent, its slowest annual pace in seven years, in the fourth quarter, economists say. “I think most people will stay neutral for the time being, at least until after the mini budget is announced.

They will want to see what kind of package the government announces and how those measures will help pull the economy out of its current doldrums,” he said. Malaysia’s government is aiming to revive the economy with a second round of spending to be announced on March 10.

Until recently, the additional spending plan was seen by economists as being worth some 7-10 billion ringgit, but with demand shrinking globally, some economists are calling for a bigger boost due to shrinking exports.

On the corporate side, Malaysia’s top lender Maybank will release its second quarter results this evening, where earnings are expected to be hit by a rise in bad debts and a drop in its investment portfolio. - REUTERS