Quiet trading after four-day Raya break

Tags: 1200-psychological mark | Bursa Malaysia | FBM KLCI | FOMC | Hang Seng Index | Maybank Investment Bank | Shanghai Composite Index | Sinopharm Group Co

Written by Cindy Yeap
Wednesday, 23 September 2009 23:42

KUALA LUMPUR: Trading on the local bourse was quiet on Sept 23 following a four-day Hari Raya break as investors await cues on the economy and interest rate movement upon conclusion of the US Federal Open Market Committee (FOMC) meeting.

Both the bellwether FBM KLCI and FBM 100 indices ended the day about one-fifth of a percent lower, mirroring lacklustre trade across most of Asia as the Shanghai Composite Index declined for a second straight day on renewed concerns on the strength of China’s economic recovery.

Hong Kong’s Hang Seng Index ended half a percent lower at 21,595.52, in contrast with a strong showing by China’s biggest pharmaceutical distributor Sinopharm Group Co, which ended its maiden day up 15.75%.

The 30-stock FBM KLCI, which opened 10.13 points or 0.8% higher, hovered on positive grounds until about an hour to closing bell. It gave up 2.13 points or 0.17% to close at 1,219.07, above the 1,200-psychological mark for an eighth straight day.

“Resistance areas of 1,224 and 1,248 will cap market gains, whilst the support areas for the FBM KLCI are located at 1,200 and 1,221,” Maybank Investment Bank said in a note on Sept 23 morning.

FBM KLCI futures contract all closed above the 1,200-mark on Sept 23, with December contracts easing one point to 1,221.

Banks — CIMB Group Holdings Bhd and AMMB HOLDINGS BHD [] — led decliners on the FBM KLCI on Sept 23, easing eight sen and nine sen to RM11.24 and RM4.31, respectively. Mobile operator, DIGI.COM BHD [], dipped as much as 74 sen or 3.42% intra-day, as the listing of larger rival, Maxis Bhd, draws closer.

Both stocks are positioned as “dividend plays”. DiGi ended the day at RM21.30, down 34 sen or 1.57% with 1.86 million shares done.

Meanwhile, the broader FBM 100 shed 12.37 points or 0.15% to 8,004.7 points, shrugging off overnight gains on Wall Street. Market breadth turned negative in the afternoon session with little new leads to stoke investor’s interest.

Trading volume was thin with only 677.95 million shares worth RM1.05 billion changing hands. Interest in Sept 23’s six top active stocks — KNM GROUP BHD [], AIRASIA BHD [], LAND & GENERAL BHD [], OILCORP BHD [], SAAG Bhd and HUBLINE BHD [] — made up just over 20% of total trading.

Meanwhile, crude oil futures stayed above US$70-mark in after- hour electronic trading on the New York Mercantile Exchange on Sept 23, easing three cents to US$71.52 at 5.30pm in Kuala Lumpur. Gold climbed US$1.50/oz to US$1,015.90/oz.

December crude palm oil contracts ended flat at RM2,146 on the Malaysian Derivatives Exchange on Sept 23 while January contracts fell RM8 to RM2,142.

The ringgit strengthened against the US dollar on Sept 23 at RM3.4640, highest since it hit RM3.4592 on Dec 18 last year.

Investors are likely to keep watch on shares of MALAYSIAN AIRLINE SYSTEM BHD [], whose shares added nine sen or 3.08% to RM3.01 with 810,000 shares done. Its new managing director Tengku Azmil Zahruddin is slated to unveil a business transformation plan for the national carrier on Oct 2.

Also of interest is BURSA MALAYSIA BHD [], where sentiment had been boosted by its tie-up with CME Group Inc. The stock added 17 sen or 2.13% to RM8.17 on Sept 23, bringing gains over the past four market days to 40 sen or 5.15%.

The performance of China Metallurgical Corp Ltd’s debut in Hong Kong this morning may also have some bearing on trading sentiment. Expectations are reportedly for prices to dip below its initial public offering price.