Sime, MISC, CIMB weigh on blue chips

KUALA LUMPUR: Key regional markets fell in early trade on Friday, Jan 29 as investors' sentiment was impacted by the weak Wall Street and other external factors, with Hong Kong down 1.3% at the opening bell.

At 10am, the FBM KLCI was down 8.78 points to 1,255.73. Turnover was 179 million shares valued at RM186.95 million.

Declining stocks beat advancers more than four to one with 362 losers to 80 gainers while 143 stocks were unchanged. This is unlike Thursday where the broader market was firmer despite some selling on index-linked stocks.

However, the FBM KLCI strong support level remains at 1,250, which is the major technical support.

Hong Kong's Hang Seng Index opened 1.3% lower at 20,086.76 while Japan's Nikkei 225 slipped 1.56% to 10,252.16 and Singapore's Straits Times Index fell 1.15% to 2,725.94.

Light crude oil rose eight cents to US$73.72 but US spot gold fell US$3.19 to US$1,083.91.

RHB Research said in its daily trading strategy that while the fierce selling pressure on the FBM KLCI showed signs of easing yesterday, it has not shown any signs of a potential rebound soon.

"Instead, the benchmark could experience follow-through selling activities in coming days, should the recent
heavy selling on the heavyweights stocks persist," it said.

RHB Research said dampened further by the fragile foreign markets sentiment, a resumption of selling in the regional markets will lead the index towards the major 1,250 technical support level.

"As we cautioned, a breakdown from 1,250 will not only derail the FBM KLCI's medium-term and the 10-month old uptrend, it will also mean a revisit to the crucial 1,200 psychological level soon," it said.

To turn back to the positive trading mode, the FBM KLCI must recover to above the strong resistance near the 40-day SMA of 1,278, said RHB Research.

Sime Darby fell 16 sen to RM8.50, MISC 13 sen to RM8.01 while MISC-09 gave up 11 sen to 72 sen andf MISC-OR 9.5 sen to 72 sen. Kulim lost 11 sen to RM7.20 and CIMB 10 sen to RM12.64 and Bursa nine sen to RM7.68.

Perstima was the top gainer, up 22 sen to RM3.74 following the rebound in its earnings while Gadang also rose, up seven sen to RM1.17.

Gadang's 2Q net profit surged 88% to RM3.52 million from RM1.87 million a year earlier mainly due to lower cost. Its revenue fell 6.9% to RM62.37 million from RM66.98 million.

Perstima's 3Q net profit surged to RM20.67 million from RM1.22 million a year earlier. This was attributed to the timing difference between the selling price and the raw material price changes coupled with positive contribution from a subsidiary. Its revenue fell 25% to RM210.91 million from RM281.31 million.