On 8.3.2010:
FBM KLCI was at a two-year high of 1324.22. It rose 1.9% that day. (Since March 10th 2009, it had risen 469 points (55%) from the FBM KLCI's low of 855.24.)
The FBM SmallCap Index, which tracks the performance of 98% of listed stocks outside the top 100 companies, advanced at 1.16%.
The broader FBM Emas Index climbed 1.7%.
Therefore, while the top counters saw heavy buying interest on 8.3.2010, the smaller-sized firms trailed behind.
Showing posts with label klci. Show all posts
Showing posts with label klci. Show all posts
Tuesday 9 March 2010
Tuesday 2 March 2010
Where will the KLCI be heading?
Market Watch
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Tuesday 23 February 2010
Friday 5 February 2010
KLSE Market PE is around 20. Where will the KLCI be heading?
KLSE Composite Index
Market Valuation
28.1.10
PE Ratio 20.50
DY 2.53
P/B 2.23
KLCI 1264.51
Tuesday 12 January 2010
Reviewing the rise in KLCI from March 09 to now
The market turned in March 09. Those who continued to hold their stocks during the downturn would have seen substantial rebound in the prices of their stocks. Remarkably many good stocks have risen above their previous highs.
The initial rise in the prices of these stocks was due to the steep bargain offered by the knocked-down prices created during the severe downturn. Soon this steep bargain was eroded and most of the stocks were trading close to their fair price. The market has the tendency to over-react on the downside and the upside. As was mentioned before, this has something to do with the inexact science of finding the intrinsic value of a particular stock. Moreover, there are many participants in the market who felt this is not important, driven mainly in their "trade" or "investing" by studying the sentiment driving the buying and selling of a particular stock.
What can we recollect from March 09 to now in KLSE? The initial price rise from March 09 was broad base. Almost all counters went up. Few were laggards. Soon the initial rise flattened. The blue chips however continued to performed well. The index linked counters continued their steady rise over the last few months, probably supported by huge institutional investors initially. The financial counters moved steadily and swiftly, followed by others blue chips and KLCI component stocks. The other stocks did not move much, though there were much excitement in some individual stocks like Mamee, Daibochi, HaiO and others.
As usual, the retail investors were slow to enter the market missing the steepest part of the market rise. It should be of interest to know the percentage of previous retail investors who are now permanently out of the stock market following the calamity in the market in 2008. But the market is always a huge magnet. When the market rises, new players (and also suckers) are attracted in. The market has paused on a few occasions over the last 9 months. The correction was not painful, the worst was a 6 percentage dip in the index over a brief period so far.
As to whether the market price presently reflects the fundamentals, there are as many who argue either ways. Is the market undervalued at present price? Is the market overvalued at present price levels? Is the market reflecting the fundamentals of the economy? Is the market price ahead of the economy, not supported by the underlying fundamentals? One way to get out of this confusion is to realise that in investing, you are investing into stocks and not into the market. Therefore, for those stock pickers, the importance is in understanding the business of the company, the quality of its management and being able to place a value on the price of the business of this company.
Since the start of market trading this new year, the market has risen upwards extremely fast indeed. Many would have seen significant gains in their portfolio. Many stocks have reached their 52 weeks high and there are also many that reach their all time high prices. The prices of various stocks climbed not by mini-steps but by giant steps. Interestingly, a piece of good news can push up a stock price by a large amount. The present play is in the glove counters. This sector has proven to be resilient and growing. Can one truly believe that the business fundamentals of a stock has increased 2 or 3 folds over this short period as would have to be accounted for by such rising prices in the stock? As with all things too good to be true, be prepared now for when the music stops. This is particularly most relevant for those who are late or recent comers to this wonderful bull party in the stock market.
Among my favourite stock picking matrix: Search for those companies with 5 or 10 years consistent records of :
At bargain prices,
[where,
FCF = Free Cash Flow = Cash Flow from Operation - Cash Flow from Investing = (CFO - CFI)
TOCE = Total Capital Employed = (Equity + LT Debt)
EV = Enterprise Value = (Market Cap + ST Debt + LTL Debt - Cash)]
http://www.investopedia.com/articles/stocks/05/cashcow.asp
The initial rise in the prices of these stocks was due to the steep bargain offered by the knocked-down prices created during the severe downturn. Soon this steep bargain was eroded and most of the stocks were trading close to their fair price. The market has the tendency to over-react on the downside and the upside. As was mentioned before, this has something to do with the inexact science of finding the intrinsic value of a particular stock. Moreover, there are many participants in the market who felt this is not important, driven mainly in their "trade" or "investing" by studying the sentiment driving the buying and selling of a particular stock.
What can we recollect from March 09 to now in KLSE? The initial price rise from March 09 was broad base. Almost all counters went up. Few were laggards. Soon the initial rise flattened. The blue chips however continued to performed well. The index linked counters continued their steady rise over the last few months, probably supported by huge institutional investors initially. The financial counters moved steadily and swiftly, followed by others blue chips and KLCI component stocks. The other stocks did not move much, though there were much excitement in some individual stocks like Mamee, Daibochi, HaiO and others.
As usual, the retail investors were slow to enter the market missing the steepest part of the market rise. It should be of interest to know the percentage of previous retail investors who are now permanently out of the stock market following the calamity in the market in 2008. But the market is always a huge magnet. When the market rises, new players (and also suckers) are attracted in. The market has paused on a few occasions over the last 9 months. The correction was not painful, the worst was a 6 percentage dip in the index over a brief period so far.
As to whether the market price presently reflects the fundamentals, there are as many who argue either ways. Is the market undervalued at present price? Is the market overvalued at present price levels? Is the market reflecting the fundamentals of the economy? Is the market price ahead of the economy, not supported by the underlying fundamentals? One way to get out of this confusion is to realise that in investing, you are investing into stocks and not into the market. Therefore, for those stock pickers, the importance is in understanding the business of the company, the quality of its management and being able to place a value on the price of the business of this company.
Since the start of market trading this new year, the market has risen upwards extremely fast indeed. Many would have seen significant gains in their portfolio. Many stocks have reached their 52 weeks high and there are also many that reach their all time high prices. The prices of various stocks climbed not by mini-steps but by giant steps. Interestingly, a piece of good news can push up a stock price by a large amount. The present play is in the glove counters. This sector has proven to be resilient and growing. Can one truly believe that the business fundamentals of a stock has increased 2 or 3 folds over this short period as would have to be accounted for by such rising prices in the stock? As with all things too good to be true, be prepared now for when the music stops. This is particularly most relevant for those who are late or recent comers to this wonderful bull party in the stock market.
Among my favourite stock picking matrix: Search for those companies with 5 or 10 years consistent records of :
- high ROE of >15% and
- generating large FCF (FCF/Sales >5%, high FCF/TOCE of >10%)
At bargain prices,
- the EYs (EPS/Price) and DYs are at the higher of their usual historical ranges,.and
- the FCF/EV yields are attractive multiples of the risk free interest rates offered by fixed deposits.
[where,
FCF = Free Cash Flow = Cash Flow from Operation - Cash Flow from Investing = (CFO - CFI)
TOCE = Total Capital Employed = (Equity + LT Debt)
EV = Enterprise Value = (Market Cap + ST Debt + LTL Debt - Cash)]
http://www.investopedia.com/articles/stocks/05/cashcow.asp
Friday 8 January 2010
Value of Equity Offerings in Malaysia in 2009
Malaysia equity offerings
Year RM mil (No. of issue) % chg
2009 15,234 (26) 857.51%
2008 1,591 (24) -81.22%
2007 8,472 (48) 130.84%
2006 3,670 (45) -8.14%
2005 3,995 (86) -19.71%
2004 4,976 (72) 62.67%
2003 3,059 (49)
Source: Bloomberg
Malaysia's equity market expanded more than eight times to RM 15.23 billion year-on-year in 2009, helped by Maxis Bhd's mega initial public offering (IPO) as well as the liberalisation of bumiputera equity rules. This came after a 81.2% year-on-year slump in activity to RM 1.59 billion in 2008 from the pre-Lehman collapse heydays of 2007 that saw RM 8.47 billion raised from 48 issuances.
"The sharp increase in equity market activity could be attributed to the easing of listing regulations on Bursa Malaysia. This encourages more foreign companies to list on Bursa Malaysia, which saw three Chinese companies listed in 2009," Bloomberg said in its latest annual review of Malaysia's capital market.
The number of equity offerings was only up marginally to 26 in 2009 from 24 in 2008.
CIMB topped 2009's list of investment banks that sold and underwrote a company's securities in Malaysia.
Malaysian corporate bond
Total Malaysian corporate bond issuances:
2009 RM 52.46 billion (+8.25% from last year)
2008 RM 48.63 billion
Malaysian Islamic Bond Issuances (component of Total Malaysian corporate bond issuances)
2009 RM 32.17 billion (+42.5% from last year)
The 42.5% jump in Malaysian Islamic bond issuances last year made up for the 21.42% slide in corporate bond issuances in 2009.
The volume of syndicated loans market in Malaysia, meanwhile, slumped.
2009 US$4.55 billion ( -53.44% from last year)
2008 US$9.77 billion
The Edge Financial Daily
2008 1,591 (24) -81.22%
2007 8,472 (48) 130.84%
2006 3,670 (45) -8.14%
2005 3,995 (86) -19.71%
2004 4,976 (72) 62.67%
2003 3,059 (49)
- CIMB topped the 2009 Malaysian Ringgit Bonds table, having arranged issuances worth RM 18.63 billion in proceeds.
- CIMB also topped the 2009 Malaysian Ringgit Islamic Bonds table with RM 12.61 billion in proceeds arranged, cornering 39.2% market share, according to data from Bloomberg's Malaysia Capital Markets Review.
2009 RM 52.46 billion (+8.25% from last year)
2008 RM 48.63 billion
2009 RM 32.17 billion (+42.5% from last year)
Syndicated Loans Market
2009 US$4.55 billion ( -53.44% from last year)
2008 US$9.77 billion
The Edge Financial Daily
Upward trend intact, stock picking is key
KLCI Valuation
Support from strong growth outlook and positive market drivers
Longer term uptrend intact. The KLCI is now trading at 15 times 2010 earnings (above its post-crisis average of 14 times) and 1.8 times book value (above its post-crisis average of 1.7 times).
Following strong GDP growth in the last two quarters, we upgraded our projected GDP growth to 5% for 2010, a turnaround from -2.4% in 2009. Corporate earnings in the last two quarters have been upgraded by 6.7% for 2009 and 11.9% for 2010.
With that, we expect 2010 earnings to exceed pre-crisis levels. On the back of strong growth outlook and positive market drivers, the longer-term upward trend is intact. And riding on strong liquidity, multiples could be higher over the longer term.
Our end-2010 KLCI target of 1,448 is based on higher 16 times 2011 earnings, achieved in the 2007 upswing. KLCI's valuations remain higher compared to regional markets. This could result in Malaysia lagging regional markets. This could result in Malaysia lagging regional markets in an upswing.
That said, the stellar 50% gain from the March low is likely to result in intermittent profit-taking. In 1998 and 2001, the market rebounded by 26% - 136% over five months.
After the initial rebound, the KLCI corrected 15% - 20% over two months in both cases. In this recovery, the KLCI is up 50% from March, and the sharpest correction since was only a 6% drop. In 1998 and 2001, the market went on to reach new record highs, post-correction.
Ref: HwangDBS Vickers Research
Best Performers in the KLCI
From March 09 low (%)
Genting 122
AMMB 111
CIMB Group 107
Axiata Group 86
Maybank 86
Astro 84
MMC Corp 79
PPB Group 70
Public Bank 58
KL Kepong 57
Hong Leong Bank 56
Parkson Holdings 53
IOI Corp 50
RHB Capital 48
KLCI 50
From 4Q09 (%)
Hong Leong Bank 24
AMMB 16
CIMB Group 15
KL Kepong 13
Tanjong 10
Public Bank 7
Sime Darby 7
IOI Corp 4
Tenaga Nasional 4
PPB Group 4
RHB Capital 3
Genting 3
Digi.com 3
MAS 2
Parkson Holdings 2
KLCI 5
Biggest contributors to the KLCI's gain from March 2009 low
39% Banks
25% Plantation
10% Gaming
8% Telco
7% Power
7% Others
Source: DBS Vickers, Bloomberg
Genting 122
AMMB 111
CIMB Group 107
Axiata Group 86
Maybank 86
Astro 84
MMC Corp 79
PPB Group 70
Public Bank 58
KL Kepong 57
Hong Leong Bank 56
Parkson Holdings 53
IOI Corp 50
RHB Capital 48
KLCI 50
From 4Q09 (%)
Hong Leong Bank 24
AMMB 16
CIMB Group 15
KL Kepong 13
Tanjong 10
Public Bank 7
Sime Darby 7
IOI Corp 4
Tenaga Nasional 4
PPB Group 4
RHB Capital 3
Genting 3
Digi.com 3
MAS 2
Parkson Holdings 2
KLCI 5
Biggest contributors to the KLCI's gain from March 2009 low
39% Banks
25% Plantation
10% Gaming
8% Telco
7% Power
7% Others
Source: DBS Vickers, Bloomberg
Friday 1 January 2010
FBM KLCI closes year up 45%
For the year, the FBM KLCI gained a total of 396 points or 45.2% after rising from 876.8 at the start of the year and ending at 1,272.8. At its lowest point, the index fell to 838 in March.
While the gains were slightly less than most regional bourses, it should be noted that the local stock market and domestic economy was also relatively more resilient during the crisis.
As a comparison, key market indices in China, India, Taiwan and Indonesia surged 78% to 87% for the year. Hong Kong was up 52%, South Korea rose 50% and Singapore was up 64%, but Japan lagged the region with only a 19% gain.
http://www.theedgemalaysia.com/business-news/156638-fbm-klci-closes-year-up-45-.html
While the gains were slightly less than most regional bourses, it should be noted that the local stock market and domestic economy was also relatively more resilient during the crisis.
As a comparison, key market indices in China, India, Taiwan and Indonesia surged 78% to 87% for the year. Hong Kong was up 52%, South Korea rose 50% and Singapore was up 64%, but Japan lagged the region with only a 19% gain.
http://www.theedgemalaysia.com/business-news/156638-fbm-klci-closes-year-up-45-.html
Tuesday 15 December 2009
Technicians should take note
Defensive stocks may not be spared, says chartist
Tags: BAT Malaysia Bhd | Defensive stocks | Dubai World | FBM KLCI | Finance sector | Fitch Ratings | Genting Bhd | Lee Cheng Hooi | Maybank Investment Bank | Nakheel | Petronas Dagangan Bhd | Plantations | YTL Corporation Bhd
Written by Daniel Khoo
Monday, 14 December 2009 11:34
KUALA LUMPUR: Defensive stocks may not be spared the brunt of an expected “steep correction” in the market ahead, said a technical analyst.
Maybank Investment Bank’s head of retail research, equity markets, Lee Cheng Hooi, who last Friday advised investors to liquidate their stocks, said some key FBM KL Composite Index stock constituents may lead declines in the market.
Among stocks which Lee expects will undergo a correction are YTL CORPORATION BHD [], GENTING BHD [], BAT Malaysia Bhd and PETRONAS DAGANGAN BHD [].
“Despite these stocks being defensive in nature, they don’t seem to be in great shape,” he told The Edge Financial Daily pursuant to his chart analysis of these stocks.
Lee also said banking stocks were “looking a bit high” and he did not rule out a further correction in the sector. The finance sector constitutes about 35.7% weightage on the FBM KLCI, followed by PLANTATION []s.
“The market is high, and we will likely see a snowball sell effect,” he said, adding that the local benchmark index may well fall below 1,200 since its run-up a few months ago.
In a report last Friday, Lee urged investors to liquidate their stocks in view of the “steep correction” round the corner, as the FBM KLCI hovered at a key neckline support level of the head and shoulders chart pattern.
He said the FBM KLCI may have peaked at 1,288.42 on Nov 17, 2009, and “urged investors to liquidate all their stocks on any and every rally”. He said all the FBM KLCI’s indicators (CCI, DMI, MACD, Oscillator and Stochastic) turned negative recently.
“There could be a potential steep correction very soon. Tactically, investors should liquidate all their stocks. If the FBM KLCI breaks below 1,255, the market would head down towards 1,207 (the measurement target of the dreaded head and shoulder pattern),” he said.
The head and shoulders pattern is a reversal chart pattern after a long upward trend and is recognised by technical analysts to forecast likely future trends in stock markets.
“Large local funds are distributing their massive positions, whilst maintaining the illusion that all is well with the FBM KLCI and FBM 100,” he added in the report.
Lee said weakness in most blue-chip components and mid-capped stocks would cause further market downside in the medium term, and the FBM KLCI was holding above the 50-day simple moving average for now. Lee said any US dollar’s rise would be among the factors giving downward pressure to equity markets.
FBM KLCI closed almost flat last Friday at 1,260 points with a high degree of uncertainty throughout the trading day. The benchmark index has risen about 50% from its low of 835.17 about a year ago.
There was now risk aversion to emerging markets after Dubai delayed its debt repayments, Lee further told The Edge Financial Daily, advising investors to hold cash at this point in time.
He likened the state of the world economy now to “a house of cards”.
“Dubai has started it (the correction), and these debt defaults will cause jitters in the world economy,” Lee said, referring to the latest news of debt repayment concerns in Spain and Greece.
Dubai is delaying its debt repayment, putting at risk the US$59 billion (RM200 billion) debt held by government controlled Dubai World and its property arm and an upmarket builder Nakheel.
Fitch Ratings last Tuesday announced that Latvia and Lithuania’s credit ratings were under pressure from the sharp deterioration in public finances, according to a Bloomberg report.
The same agency also cut its rating on Greek government bonds one step lower to BBB+, causing a heavy selloff on Greece’s government bond markets on fears over debt default.
Reports also said Standard and Poor’s shifted its outlook for Spain’s debt from stable to negative. The agency further said “reducing Spain’s sizeable fiscal and economic imbalances required strong policy actions, which have not yet materialised”.
Heavy bond selloffs have also been reported in countries like Portugal and Ireland as investors feared credit ratings for these countries may be downgraded.
This article appeared in The Edge Financial Daily, December 14, 2009.
Tags: BAT Malaysia Bhd | Defensive stocks | Dubai World | FBM KLCI | Finance sector | Fitch Ratings | Genting Bhd | Lee Cheng Hooi | Maybank Investment Bank | Nakheel | Petronas Dagangan Bhd | Plantations | YTL Corporation Bhd
Written by Daniel Khoo
Monday, 14 December 2009 11:34
KUALA LUMPUR: Defensive stocks may not be spared the brunt of an expected “steep correction” in the market ahead, said a technical analyst.
Maybank Investment Bank’s head of retail research, equity markets, Lee Cheng Hooi, who last Friday advised investors to liquidate their stocks, said some key FBM KL Composite Index stock constituents may lead declines in the market.
Among stocks which Lee expects will undergo a correction are YTL CORPORATION BHD [], GENTING BHD [], BAT Malaysia Bhd and PETRONAS DAGANGAN BHD [].
“Despite these stocks being defensive in nature, they don’t seem to be in great shape,” he told The Edge Financial Daily pursuant to his chart analysis of these stocks.
Lee also said banking stocks were “looking a bit high” and he did not rule out a further correction in the sector. The finance sector constitutes about 35.7% weightage on the FBM KLCI, followed by PLANTATION []s.
“The market is high, and we will likely see a snowball sell effect,” he said, adding that the local benchmark index may well fall below 1,200 since its run-up a few months ago.
In a report last Friday, Lee urged investors to liquidate their stocks in view of the “steep correction” round the corner, as the FBM KLCI hovered at a key neckline support level of the head and shoulders chart pattern.
He said the FBM KLCI may have peaked at 1,288.42 on Nov 17, 2009, and “urged investors to liquidate all their stocks on any and every rally”. He said all the FBM KLCI’s indicators (CCI, DMI, MACD, Oscillator and Stochastic) turned negative recently.
“There could be a potential steep correction very soon. Tactically, investors should liquidate all their stocks. If the FBM KLCI breaks below 1,255, the market would head down towards 1,207 (the measurement target of the dreaded head and shoulder pattern),” he said.
The head and shoulders pattern is a reversal chart pattern after a long upward trend and is recognised by technical analysts to forecast likely future trends in stock markets.
“Large local funds are distributing their massive positions, whilst maintaining the illusion that all is well with the FBM KLCI and FBM 100,” he added in the report.
Lee said weakness in most blue-chip components and mid-capped stocks would cause further market downside in the medium term, and the FBM KLCI was holding above the 50-day simple moving average for now. Lee said any US dollar’s rise would be among the factors giving downward pressure to equity markets.
FBM KLCI closed almost flat last Friday at 1,260 points with a high degree of uncertainty throughout the trading day. The benchmark index has risen about 50% from its low of 835.17 about a year ago.
There was now risk aversion to emerging markets after Dubai delayed its debt repayments, Lee further told The Edge Financial Daily, advising investors to hold cash at this point in time.
He likened the state of the world economy now to “a house of cards”.
“Dubai has started it (the correction), and these debt defaults will cause jitters in the world economy,” Lee said, referring to the latest news of debt repayment concerns in Spain and Greece.
Dubai is delaying its debt repayment, putting at risk the US$59 billion (RM200 billion) debt held by government controlled Dubai World and its property arm and an upmarket builder Nakheel.
Fitch Ratings last Tuesday announced that Latvia and Lithuania’s credit ratings were under pressure from the sharp deterioration in public finances, according to a Bloomberg report.
The same agency also cut its rating on Greek government bonds one step lower to BBB+, causing a heavy selloff on Greece’s government bond markets on fears over debt default.
Reports also said Standard and Poor’s shifted its outlook for Spain’s debt from stable to negative. The agency further said “reducing Spain’s sizeable fiscal and economic imbalances required strong policy actions, which have not yet materialised”.
Heavy bond selloffs have also been reported in countries like Portugal and Ireland as investors feared credit ratings for these countries may be downgraded.
This article appeared in The Edge Financial Daily, December 14, 2009.
Thursday 15 October 2009
FBMKLCI rises to new high
FBMKLCI rises to new high
Published: 2009/10/14
THE FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) jumped to the year's new high as investors snapped up banking-related stocks today.
The benchmark index closed 13.33 points higher at 1,246.84 after hitting an intraday high of 1,248.14.
Dealers said the Malaysian Institute of Economic Research's forecast that the country's economy would shrink at a slower pace of 3.3 per cent this year, an improvement from 4.2 per cent projected earlier, provided some support.
Rising buying interest in penny and small cap stocks with the return of risk appetite was also evident, they said.
"Follow-through buying by foreign funds in key banking-related stocks such as Maybank and CIMB Group helped the FBM KLCI extend its gain," a dealer said.
At the close, the FBM Emas Index gained 97.57 points to 8,393.58, the FBM Top 100 increased 91.98 points to 8,171.25, the FBM 70 jumped 111.23 points to 8,257.70 and the FBM ACE Index advanced 48.30 points to 4,269.02.
The Finance Index surged 171.58 points to 10,528.24, the Plantation Index gained 43.75 points to 6,031.33 and the Industrial Index added 13.85 points to 2,667.12.
Gainers outnumbered losers by 574 to 174 while 208 counters unchanged and 338 others untraded.
Turnover increased to 1.261 billion shares valued at RM1.655 billion from 939.925 million shares worth RM1.005 billion yesterday.
Among active counters, KNM Group rose four sen to 84.5 sen, SAAG Consolidated added three sen to 23.5 sen and Silk Holdings advanced 5.5 sen to 50 sen.
Time Engineering inched up 1.5 sen to 38 sen, Hubline Bhd-OR added one sen to 11 sen and Green Packet-Warrants gained 5.5 sen to 42.5 sen.
Conglomerate Sime Darby rose seven sen to RM8.69 while finance heavyweight Maybank gained 22 sen to RM6.96.
CIMB Group advanced 16 sen to RM12.32, Tenaga Nasional rose two sen to RM8.25, IOI Corp edged up six sen to RM5.33 and Genting gained seven sen RM7.39.
The Main Market turnover jumped to 1.173 billion shares worth RM1.633 billion from 820.767 million shares worth RM982.236 million yesterday.
The ACE Market volume, however, decreased to 49.662 million shares valued at RM11.937 million from 100.747 million shares valued at RM18.028 million while warrants increased to 28.860 million units worth RM7.071 million from 14.911 million unit worth RM3.664 million.
Consumer products accounted for 51.489 million shares traded on the Main Market, industrial products 284.396 million, construction 59.883 million, trade and services 368.269 million, technology 100.543 million, infrastructure 63.492 million, finance 76.327 million, hotels 4.486 million, properties 145.674 million, plantations 15.498 million, mining 92,200, REITs 2.852 million and closed/fund 133,000.
Bernama
Published: 2009/10/14
THE FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) jumped to the year's new high as investors snapped up banking-related stocks today.
The benchmark index closed 13.33 points higher at 1,246.84 after hitting an intraday high of 1,248.14.
Dealers said the Malaysian Institute of Economic Research's forecast that the country's economy would shrink at a slower pace of 3.3 per cent this year, an improvement from 4.2 per cent projected earlier, provided some support.
Rising buying interest in penny and small cap stocks with the return of risk appetite was also evident, they said.
"Follow-through buying by foreign funds in key banking-related stocks such as Maybank and CIMB Group helped the FBM KLCI extend its gain," a dealer said.
At the close, the FBM Emas Index gained 97.57 points to 8,393.58, the FBM Top 100 increased 91.98 points to 8,171.25, the FBM 70 jumped 111.23 points to 8,257.70 and the FBM ACE Index advanced 48.30 points to 4,269.02.
The Finance Index surged 171.58 points to 10,528.24, the Plantation Index gained 43.75 points to 6,031.33 and the Industrial Index added 13.85 points to 2,667.12.
Gainers outnumbered losers by 574 to 174 while 208 counters unchanged and 338 others untraded.
Turnover increased to 1.261 billion shares valued at RM1.655 billion from 939.925 million shares worth RM1.005 billion yesterday.
Among active counters, KNM Group rose four sen to 84.5 sen, SAAG Consolidated added three sen to 23.5 sen and Silk Holdings advanced 5.5 sen to 50 sen.
Time Engineering inched up 1.5 sen to 38 sen, Hubline Bhd-OR added one sen to 11 sen and Green Packet-Warrants gained 5.5 sen to 42.5 sen.
Conglomerate Sime Darby rose seven sen to RM8.69 while finance heavyweight Maybank gained 22 sen to RM6.96.
CIMB Group advanced 16 sen to RM12.32, Tenaga Nasional rose two sen to RM8.25, IOI Corp edged up six sen to RM5.33 and Genting gained seven sen RM7.39.
The Main Market turnover jumped to 1.173 billion shares worth RM1.633 billion from 820.767 million shares worth RM982.236 million yesterday.
The ACE Market volume, however, decreased to 49.662 million shares valued at RM11.937 million from 100.747 million shares valued at RM18.028 million while warrants increased to 28.860 million units worth RM7.071 million from 14.911 million unit worth RM3.664 million.
Consumer products accounted for 51.489 million shares traded on the Main Market, industrial products 284.396 million, construction 59.883 million, trade and services 368.269 million, technology 100.543 million, infrastructure 63.492 million, finance 76.327 million, hotels 4.486 million, properties 145.674 million, plantations 15.498 million, mining 92,200, REITs 2.852 million and closed/fund 133,000.
Bernama
Wednesday 29 July 2009
Running ahead of fundamentals?
Running ahead of fundamentals?
Written by Ellina Badri, Isabelle Francis & Surin Murugiah
Tuesday, 28 July 2009 23:51
KUALA LUMPUR: Regional markets continued to rise on July 28, driven by high liquidity but some analysts caution that equities may have run ahead of fundamentals.
Some hint of profit-taking emerged as Japan’s Nikkei 225 snapped its nine-day run and dipped 0.01% to 10,087.26 points. European markets turned negative in early trade on July 28, dragged down by losses in energy stocks.
Hong Kong’s Hang Seng Index gained 1.84% to 20,624.54, Shanghai’s Composite Index added 0.09% to 3,438.37, South Korea’s Kospi rose 0.13% to 1,526.03, Taiwan’s Taiex Index advanced 1.62% to 7,142.63 and Singapore’s Straits Times Index was up 1.84% to 2,624.04.
Macquarie Research, in a report titled When depositors become investors on Monday, said liquidity was returning to Asia and global emerging markets.
It said the fund flow numbers for the week ended July 22 showed that liquidity returned to Asia, ex-Japan and global emerging markets with net weekly inflows of US$973.2 million (RM3.41 billion) and US$1.1 billion, respectively.
This reversed the net outflow trend of the past four weeks, it said.
It said Greater China (China, Hong Kong and Taiwan) funds saw their biggest inflows since December 2007 (US$213.3 million), adding that sentiment towards China remained positive, with investors looking to achieve a broad and diversified exposure.
“In our view, the market conditions continue to be driven by liquidity rather than fundamental factors. Importantly, foreign investors are not the only source of liquidity,” it said, adding that domestic sources were also playing an important role, as depositors were switching from time deposits to demand deposits.
“Interest rate differentials between time and demand deposits are narrowing. With the opportunity cost of liquidity low, a greater proportion of funds are moving to liquid assets (demand deposits),” it said.
The research house also said while liquidity conditions were often a function of economic fundamentals, in the very near term there was the obvious potential for more money to chase equities despite what it viewed as elevated valuations.
“The yield gap between the earnings yield and the deposit rate expanded to an historical high. Despite elevated valuations, the significant yield differential between equities and bank deposits could induce investors to continue to switch from bank deposits to equities.
“Retail participation could rise further. The low returns on alternative investments, such as bank deposits, as well as the strong market momentum, were two likely drivers of the increase in retail investor participation,” it said.
Macquarie said the strong liquidity was pushing Asian equities to stretched valuation levels.
“We think a strong recovery in global final demand is now priced in.
“While hard signs of demand recovery are absent, we would ‘lean into’ the current rally, progressively reducing beta as equity markets move further and further away from levels justified by economic fundamentals,” it said.
On Malaysia, Macquarie said the yield gap, which it defined as 12-month forward earnings yield minus demand deposit rate, had widened further. “Admittedly, the domestic monetary base could be the next potential source of liquidity driving up the market,” it said.
Scott Lim, MIDF Asset Management chief executive and chief investment officer, agreed that the market was liquidity-driven, and valuations were getting stretched.
“The bulk of the rally has reflected liquidity more than fundamentals. Apart from liquidity and efforts by governments to increase access to financing, there is nothing much else driving the market.
“Investors have grounds to be cautious. Either fundamentals have to catch up with valuations, or valuations have to come down to meet it. Either one has to give,” he said.
Lim added that the liquidity was trying to rebuild a bubble, potentially the biggest one of all, but certain markets such as China were showing they were ready to stage a fierce formation of a stock market bubble.
However, Merrill Lynch Global Wealth Management Asia-Pacific investment strategist Stephen Corry said the next six months would still present buying opportunities in equities, regardless of it being an extended bear market rally or the start of a new bull market.
Corry was bullish on emerging market stocks, driven by recovery numbers in terms of car sales, while financial stocks remained favourites.
However, he cautioned that strong corporate earnings growth would need to be supported by equities’ current valuations.
Light crude oil rose nine cents per barrel to US$68.47 as at 6.20pm. Crude palm oil futures for third-month delivery gained RM42 per tonne to RM2,140.
At Bursa Malaysia, the FBM KLCI jumped 1.38% or 15.95 points to 1,172.38, its highest level since July 1 last year, led by gains by blue chips.
TA Securities technical analyst Stephen Soo said the immediate resistance level was 1,188 with the next level at 1,200. He said the respective support levels would be 1,165 and 1,148.
Turnover rose to 1.12 billion shares valued at RM1.63 billion. Gainers led losers by 491 to 194, while 249 counters traded unchanged. Market capitalisation over the last 12 trading days increased by RM60.48 billion to RM876.75 billion. The FBM100 [] gained 100.83 points to 7,689.37 and the FBM Emas added 103.69 points to 7,905.20.
Among the major gainers, SIME DARBY BHD [] and UMW HOLDINGS BHD [] added 25 sen each to RM8.15 and RM6.30, IOI CORPORATION BHD [] was up 22 sen to RM5 and GENTING BHD [] gained 15 sen to RM6.70.
MALAYAN BANKING BHD [], BUMIPUTRA-COMMERCE HOLDINGS [] Bhd and PUBLIC BANK BHD [] rose 10 sen each to RM6.55, RM10.20 and RM10.40, respectively, while Genting Malaysia Bhd added 12 sen to RM3.
PPB GROUP BHD [] was the top loser, shedding 20 sen to RM14.30; KFC HOLDINGS (M) BHD [] fell 15 sen to RM7.35, TALIWORKS CORPORATION BHD [] lost 13 sen to RM1.61, while LOH & LOH CORPORATION BHD [] and LEBAR DAUN BHD [] fell 12 sen each to RM4.18 and 60 sen.
KNM GROUP BHD [] was the most actively traded stock with 56.8 million shares done. It fell one sen to 89.5 sen.
From the Edge Malaysia
Written by Ellina Badri, Isabelle Francis & Surin Murugiah
Tuesday, 28 July 2009 23:51
KUALA LUMPUR: Regional markets continued to rise on July 28, driven by high liquidity but some analysts caution that equities may have run ahead of fundamentals.
Some hint of profit-taking emerged as Japan’s Nikkei 225 snapped its nine-day run and dipped 0.01% to 10,087.26 points. European markets turned negative in early trade on July 28, dragged down by losses in energy stocks.
Hong Kong’s Hang Seng Index gained 1.84% to 20,624.54, Shanghai’s Composite Index added 0.09% to 3,438.37, South Korea’s Kospi rose 0.13% to 1,526.03, Taiwan’s Taiex Index advanced 1.62% to 7,142.63 and Singapore’s Straits Times Index was up 1.84% to 2,624.04.
Macquarie Research, in a report titled When depositors become investors on Monday, said liquidity was returning to Asia and global emerging markets.
It said the fund flow numbers for the week ended July 22 showed that liquidity returned to Asia, ex-Japan and global emerging markets with net weekly inflows of US$973.2 million (RM3.41 billion) and US$1.1 billion, respectively.
This reversed the net outflow trend of the past four weeks, it said.
It said Greater China (China, Hong Kong and Taiwan) funds saw their biggest inflows since December 2007 (US$213.3 million), adding that sentiment towards China remained positive, with investors looking to achieve a broad and diversified exposure.
“In our view, the market conditions continue to be driven by liquidity rather than fundamental factors. Importantly, foreign investors are not the only source of liquidity,” it said, adding that domestic sources were also playing an important role, as depositors were switching from time deposits to demand deposits.
“Interest rate differentials between time and demand deposits are narrowing. With the opportunity cost of liquidity low, a greater proportion of funds are moving to liquid assets (demand deposits),” it said.
The research house also said while liquidity conditions were often a function of economic fundamentals, in the very near term there was the obvious potential for more money to chase equities despite what it viewed as elevated valuations.
“The yield gap between the earnings yield and the deposit rate expanded to an historical high. Despite elevated valuations, the significant yield differential between equities and bank deposits could induce investors to continue to switch from bank deposits to equities.
“Retail participation could rise further. The low returns on alternative investments, such as bank deposits, as well as the strong market momentum, were two likely drivers of the increase in retail investor participation,” it said.
Macquarie said the strong liquidity was pushing Asian equities to stretched valuation levels.
“We think a strong recovery in global final demand is now priced in.
“While hard signs of demand recovery are absent, we would ‘lean into’ the current rally, progressively reducing beta as equity markets move further and further away from levels justified by economic fundamentals,” it said.
On Malaysia, Macquarie said the yield gap, which it defined as 12-month forward earnings yield minus demand deposit rate, had widened further. “Admittedly, the domestic monetary base could be the next potential source of liquidity driving up the market,” it said.
Scott Lim, MIDF Asset Management chief executive and chief investment officer, agreed that the market was liquidity-driven, and valuations were getting stretched.
“The bulk of the rally has reflected liquidity more than fundamentals. Apart from liquidity and efforts by governments to increase access to financing, there is nothing much else driving the market.
“Investors have grounds to be cautious. Either fundamentals have to catch up with valuations, or valuations have to come down to meet it. Either one has to give,” he said.
Lim added that the liquidity was trying to rebuild a bubble, potentially the biggest one of all, but certain markets such as China were showing they were ready to stage a fierce formation of a stock market bubble.
However, Merrill Lynch Global Wealth Management Asia-Pacific investment strategist Stephen Corry said the next six months would still present buying opportunities in equities, regardless of it being an extended bear market rally or the start of a new bull market.
Corry was bullish on emerging market stocks, driven by recovery numbers in terms of car sales, while financial stocks remained favourites.
However, he cautioned that strong corporate earnings growth would need to be supported by equities’ current valuations.
Light crude oil rose nine cents per barrel to US$68.47 as at 6.20pm. Crude palm oil futures for third-month delivery gained RM42 per tonne to RM2,140.
At Bursa Malaysia, the FBM KLCI jumped 1.38% or 15.95 points to 1,172.38, its highest level since July 1 last year, led by gains by blue chips.
TA Securities technical analyst Stephen Soo said the immediate resistance level was 1,188 with the next level at 1,200. He said the respective support levels would be 1,165 and 1,148.
Turnover rose to 1.12 billion shares valued at RM1.63 billion. Gainers led losers by 491 to 194, while 249 counters traded unchanged. Market capitalisation over the last 12 trading days increased by RM60.48 billion to RM876.75 billion. The FBM100 [] gained 100.83 points to 7,689.37 and the FBM Emas added 103.69 points to 7,905.20.
Among the major gainers, SIME DARBY BHD [] and UMW HOLDINGS BHD [] added 25 sen each to RM8.15 and RM6.30, IOI CORPORATION BHD [] was up 22 sen to RM5 and GENTING BHD [] gained 15 sen to RM6.70.
MALAYAN BANKING BHD [], BUMIPUTRA-COMMERCE HOLDINGS [] Bhd and PUBLIC BANK BHD [] rose 10 sen each to RM6.55, RM10.20 and RM10.40, respectively, while Genting Malaysia Bhd added 12 sen to RM3.
PPB GROUP BHD [] was the top loser, shedding 20 sen to RM14.30; KFC HOLDINGS (M) BHD [] fell 15 sen to RM7.35, TALIWORKS CORPORATION BHD [] lost 13 sen to RM1.61, while LOH & LOH CORPORATION BHD [] and LEBAR DAUN BHD [] fell 12 sen each to RM4.18 and 60 sen.
KNM GROUP BHD [] was the most actively traded stock with 56.8 million shares done. It fell one sen to 89.5 sen.
From the Edge Malaysia
Wednesday 8 July 2009
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