Asian markets down at midday

KUALA LUMPUR: Asian markets, including the FBM KLCI fell in morning trade on Monday, May 3 following China's order to its banks to raise their reserves as part of the country's plans to stem inflation and skyrocketing property prices.

The People's Bank of China said that the deposit reserve requirement ratio for most banks will be raised half a percentage point, starting May 10.

This is the third time this year that the central bank has raised the deposit reserve minimum.

The impact of the China's decision somewhat eclipsed the announcement by European governments and the International Monetary Fund on Sunday that they agreed on €110 billion (US$145 billion) in emergency loans for debt-ridden Greece on the condition Athens make painful budget cuts and tax increases.

At noon, Hong Kong's Hang Seng Index fell 1.38% to 20,817.16, South Korea's Kospi lost 1.23% to 1,720.15, Taiwan's TAIEX Index fell 1.07% to 7,918.32 while Singapore's Straits Times Index shed 1.04% to 2,943.67.

The stock exchanges in Japan and China were closed for holidays, as were the markets in Thailand and the Philippines.

The FBM KLCI remained relatively resilient at midday, having declined only 0.26 of a point to 1,346.12. Trading was thin with 367.12 million shares valued at RM395.25 million. Losers led gainers by 377 to 180, while 236 counters traded unchanged.

Among the major losers at noon were Top Glove Corp and Lafarge Malayan Cement that fell 16 sen each to RM12.52 and RM6.59, respectively. Parkson lost 12 sen to RM5.68, while NV Multi, AFG and Perduren fell 8 sen each to 68 sen, RM3.05 and RM1.41, respectively.

LPI Capital was the top gainer, adding 46 sen to RM15.50 after Kenanga Research initiated coverage on the stock with a buy recommendation at RM15.04 and target price RM16.80.

The research house said it favoured LPI the most among general insurers in Malaysia due to its well-diversified business portfolio enabling the company to minimise its operating risks and generates the highest return on equity (RoE) to reward shareholders.

Kuala Lumpur Kepong added 30 sen to RM16.80, BAT up 28 sen to RM44.26, Tanjong up 26 sen to RM18.14, P&O gained 21 sen to RM1.47 while Proton added 18 sen to RM4.98.

Talam was the most actively traded counter with 44 million shares done. The stock gained half a sen to 14.5 sen. Other active counters this morning included Tejari, Damasara Realty Bhd, KNM and Olympia.