FBM KLCI closes off intra-day high

KUALA LUMPUR: The headline index, the FBM KLCI, opened higher Thursday and stayed in positive territory for the better part of the day, despite weaker sentiment in the region.

The more upbeat sentiment may be buoyed by Malaysia’s stronger than expected GDP growth in the last three months of 2009. Our country’s GDP grew 4.5% y-y in 4Q09, helping pare the overall contraction for the year to just 1.7%, better than expectations at the beginning of the year.

Nonetheless, a spurt of last-minute selling led the FBM KLCI to close flat at 1,270.8 points. Some of the top gainers were APM, Fima Corp, Axiata and Jobstreet while Tanjong and YTL were among the big losers.

Market breadth was ambivalent. The ratio of gaining to losing stocks was in positive territory in the early part of the trading day but deteriorated as the day progressed. At the close, the number of losing and gaining stocks was almost at par.

Trading volume improved to 867 million shares. This was the highest level in three weeks. Market volume was boosted by two new listings, Mulpha-OR and JCY International. Axiata, which reported record profits of RM1.65 billion for 2009, was also actively traded. The stock gained 6.6% to close at RM3.73.

We remain cautious on the broader market’s outlook in the near term. There are still a lot of uncertainties in the global market. Bellwether indices in Asia opened higher Thursday bolstered by Wall Street’s overnight gains but ended the day mostly in the red.

Recent data out of the US suggests a patchy recovery, at best, in the world’s largest economy. US consumer confidence dipped in February while new home sales too dropped sharply in January 2010. Meanwhile, Europe continues to grapple with rising public debt woes. Ratings agencies indicated that they might soon lower the sovereign rating for Greece, a member country of the euro zone.