FBM KLCI ends at fresh year-high

Written by InsiderAsia
Friday, 11 September 2009 17:25

Shares on the Bursa Malaysia surged a fresh high for the year, boosted by select blue chip gains, on Friday, Sept 11. The FBM KLCI added seven points to close at 1,208.3. Some of the big gainers were BAT, CIMB, Tanjong plc and Public Bank.

Market breadth was, however, more ambivalent – starting out positive but dipping into negative territory as the day progressed. At the close, there were roughly nine losing stocks for every seven gainers.

Trading volume too stayed on the thin side suggesting that whilst sentiment remains on a firm footing, few investors are rushing into stocks after recent big gains. Less than 517 million shares were traded on Friday. Among the most actively traded counters were some of the usual suspects such as KNM, Talam, SAAG, Genting and Genting Malaysia.

Malaysia’s industrial production index (IPI) contracted 8.4% in July 2009, the smallest fall this year. The figure is the latest in a string of upbeat economic data supporting the view that the worst of the recession is behind us.

Wall Street’s overnight gains, for the fifth consecutive day, was also likely to have bolstered investor confidence and offered some reassurance that a correction may not be imminent after all. The closely monitored Dow Jones Industrial Average added 80 points to finish at its highest level for the year.

Meanwhile, economic data from the region was mixed. China’s industrial production expanded 12.3% in August 2009, the most in a year, and slightly ahead of market expectations. China’s economic growth continues to be underpinned by resilient domestic consumption.

On the other hand, Japan’s revision to its 2Q09 GDP number was much worse than expected. GDP growth for the world’s second largest economy was revised down to just 0.6% quarter-on-quarter (2.3% annualised), from the preliminary growth estimate of 0.9% (3.7% annualised), as companies cut spending and stockpiles. The revised figure suggests that Japan’s recovery from its deepest recession in decades is weaker than previously thought amid worryingly high unemployment rates.