KL shares to consolidate next week

Published: 2009/11/14

Malaysian shares are likely to consolidate next week with a downward bias ahead of South-East Asia's largest initial public offering, Maxis Bhd due on November 19.

The benchmark index meanwhile is expected to undergo small correction after rising significantly to its highest level of 1,274.08 since May last year.

The stock exchange was relatively active the earlier part of this week with the FBM KLCI breaking the psychological level of 1,270-point on firm buying of finance stocks. However, mild profit-taking at the resistance level of 1,272 limited the gains.

"Profit-taking and liquidation on rallies could still be prevalent as buying momentum softens," one of the dealers said, adding that investors should trade cautiously with a short-term horizon and relevant stop-loss move.



Another dealer, however believed that the local market could see support with the listing of the country's top mobile operator, Maxis next week.

Maxis, which has raised RM11.2 billion in Southeast Asia's largest IPO, will be included in the 30-stock FBM KLCI, replacing the national carrier Malaysia Airlines.

The dealer anticipates the FBM KLCI to reach its next resistance level of 1,285-point and a support level of 1,265-point next week.

The regional markets, on the other hand are expected to remain cautious with a bearish bias.

"Pepole are wondering if the regional governments could be pressured to allow their currencies to strengthen against the US dollar as the US economy is still weak," the dealer said.

He pointed out that if the greenback stayed weak, it would benefit the regional stock markets because more investors would pour the funds into non-dollar assets.

Investors will be on the look out for the signals from the US President, Barack Obama's nine day visit to the region as it will indicate in particular how the US intends to deal with the region in terms of economic relations.

"Any movement in the regional bourses would give an impact on the local market as well," added the dealer.

During the week just ended, the local bourse saw one new entrant, Xidelang Holdings Bhd on the Main Market of Bursa Malaysia on November 11. China-based sportswear company opened at 75 sen, a 17 sen premium over its offer price of 58 sen with 500,000 shares done,

For the week ended, its share price lost 2.5 sen to 55.5 sen on total volume of 13.691 million shares.

On a Friday-to-Friday basis, the FBM KLCI was up 10.20 points to 1,270.96.

The FBM Emas Index climbed 66 points to 8,488.83, the FBM Top 100 Index shot up 70.90 points to 8,281.01 and the FBM70 advanced 87.82 points to 8,178.10.

The FBM ACE Index, however dropped 163.78 points to 4,523.87. The Finance Index surged 151.01 points to 10,927.30 and the Plantation Index jumped 120.41 points to 6,179.32 but the Industrial Index went down 1.89 points to 2,697.98.

A total of 5.072 billion shares worth RM5.937 billion changed hands during the week just ended, down from 6.577 billion shares valued at RM6.715 billion the previous week.

Volume on the Main Market declined to 4.441 billion shares worth RM5.766 billion as against 5.354 billion shares worth RM6.339 billion.

The volume of call warrants shed to 78.166 million units worth RM17.025 million versus last week's 100.850 million units valued at RM19.928 million previously.

The ACE Market volume also went down to 477.619 million shares worth RM166.694 million from 1.009 billion shares worth RM285.710 million a week before.-- Bernama