Investors keep close watch on catalysts

By Goh Thean EuPublished: 2010/02/16
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The local stock market is expected to be quiet this week, as most retail investors are likely to be taking a break for the Chinese New Year festive season.

For the most part of the last 20 days, there were at least RM1 billion worth of stocks that changed hands. However, last Friday, there were only RM811 million worth of shares traded.

"It's a given. The market will still be quiet ... If the market can do more than RM700 million (in trades) a day (this week), it will be good news," said Kenanga Investment Bank research head Yeow Yeonzon when contacted.

Nevertheless, analysts believe the week allows investors to take their positions and hunt for good quality stocks. They believe that the broader market's rise has not ended.

"One of the market catalysts investors are keeping a close watch on is the announcement of the country's new economy model," said Yeow.



The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) is expected to trade between 1,250 and 1,270 this week.

If the support level of 1,250 points is breached, the next support level will be around 1,230 points, said analysts.

Investors will also keep a close watch on the developments of the European economy. Investors are concerned how the economies of Greece, Spain and Portugal will affect the region, and how other European countries are going to react.

"If the news globally are more positive than negative, then clearly we will see an uptake in the index," said Yeow.

Greece had revealed a 2009 budget deficit of 12.7 per cent of its gross domestic product. This is more than four times the European Union ceiling of 3 per cent and three times initial estimates.