KLCI Headings Towards 1,000 points

By Adeline Paul RajPublished: 2009/05/01

MALAYSIA'S benchmark stock index, which surged 2.4 per cent yesterday ahead of the long weekend, is likely to move higher next week to reach the 1,000-point mark, analysts said.

The Kuala Lumpur Composite Index (KLCI) gained 23.28 points to close at 990.74 yesterday, off an intra-day high of 995.05 points.

There were about four times more gainers than losers, with 202 counters unchanged.

Trading volume was heavy at 1.64 billion shares.





"I'm looking at the the KLCI hitting the 1,000-mark next week and volume breaching two billion shares," said Lee Cheng Hooi, head of retail research at Maybank Investment Bank.

This is a liquidity-driven rally, he said, with fund managers that were previously underweight, and possibly some hedge funds, showing interest again.

He advised investors to be cautious.

"I would be very careful. This rally is what I would call a bluff pull. It may go on for while longer than most, but it won't last and it may end bad," Lee said.

The market's rise yesterday was in line with strong gains on Wall Street and regional bourses.

Worries about the swine flu outbreak took a back seat as investor sentiment improved on hopes that the worst may be over for the global economy.

Bank Negara Malaysia's decision to keep the Overnight Policy Rate unchanged at 2 per cent may have also signalled this, dealers said.

All major Asian markets rose, led by Taiwan (up 6.7 per cent) and Indonesia (up 4.8 per cent).

Property stocks on Bursa Malaysia rose the most, led by SP Setia, which gained 12 per cent to RM3.54.

The day's most actively traded stock was KNM Group, which rose 7.5 per cent to 57.5 sen.

The ringgit rose against the US dollar to close at 3.557, from 3.59 the previous day.