Blue chips start on weak note

KUALA LUMPUR: Blue chips started the new week on Monday, March 15 on a weak note, with the FBM KLCI possibly testing the crucial 1,300 level as investors grow more concerned about another hike in the overnight policy rate (OPR).

At 10.01am, the FBM KLCI was down 6.67 points to 1,304.53. Turnover was 132.17 million shares valued at RM141.45 million. There were 126 gainers, 223 losers and 178 stocks unchanged.

Hong Kong's Hang Seng Index opened 0.8% lower at 21,036.47, Japan's Nikkei 225 lost 0.17% to 10,732.73 while Shanghai's Composite Index shed 0.67% to 2,993.21 but Singapore's Straits Times Index advanced 0.2% to 2,887.26.

Light crude oil fell 40 cents to US$80.84 while US spot gold added US2.26 to US$1,104.15.

Hwang DBS Vickers Research said technically speaking, it is essential for the key FBM KLCI to stay above the resistance-turned-support level of 1,305 ahead amid profit-taking temptations.

"If successful, then the benchmark index could see further upsides, building on its cumulative gain of 63.3-point or 5.1% chalked up in five weeks in a row. This is also the view of futures players, as the spot month contract for the FBM KLCI settled at 1,316 last Friday, which represents a marginal 4.8-point premium to the underlying level in the cash market," it said.

On the corporate front, of interest will be EON Capital's Extraordinary General Meeting (EGM) to be held at 4pm on Monday. Its outcome - on a proposal to appoint seven additional directors - could revive or block a previous plan by Hong Leong Bank to purchase its assets and liabilities at an implied price of RM7.10 per EON Capital share.

Meanwhile, Bloomberg reported that Bank Negara may raise the OPR further to avert asset bubbles and discourage risky investments by people seeking better returns, even as inflation will remain "modest" this year.

Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz was quoted saying "We will review the conditions at our next monetary policy meeting and work towards further normalising if necessary".

At Bursa, KKB continued to fall, down another 23 sen to RM5.35 as investors viewed the recent run-up as excessive. IOI Corp fell 11 sen to RM5.40 and Public Bank 10 sen to RM11.72 while MPI shed eight sen to RM6.63.

Berjaya Corp-LC was the most active with 10 million units done, rising four sen to RM1.04 while BCorp shares added two sen to RM1.52.

Astro was the top gainer, adding 21 sen to RM3.69 with 2.18 million shares done while Measat added seven sen to RM2.06 ahead of their earnings announcement by end-March.

Nomura Research and CIMB Equities Research are keeping Astro as Neutral, target price of RM3.80 but TA Securities has a Sell with a target price of RM3.40.

Keck Seng added 16 sen to RM5.49 on hopes of a dividend while Tanjong and Unisem added six sen each to RM17.76 and RM2.42.