Barefoot Investor: FBM KLCI climbs in early trade

KUALA LUMPUR: The FBM KLCI snapped its three-day losing streak in early trade on Friday, Feb 25 as key regional markets recovered slightly on signs that crude oil prices were stabilising.

Brent oil prices vaulted more than 7 percent to almost US$120 before pulling back on rumours that Libyan leader Muammar Gaddafi had been shot and on Saudi Arabia's reassurances that it could counter Libyan supply disruption, according to Reuters.

The pullback in oil, underpinned late gains in US stocks and caused shares in Asia's key markets to find their feet after a steady decline earlier this week, it said.

At 10am, crude oil eased 34 cents per barrel to US$96.95 on the New York Mercantile Exchange.

The FBM KLCI rose 4.31 points to 1,494.18, although analysts said the recovery might not be sustainable given the overhanging uncertainties from the geopolitical developments.

Gainers beat losers 296 to 202, while 226 counters traded unchanged. Volume was 269.50 million shares valued at RM286.02 million.

At the regional markets, Japan’s Nikkei rose 0.22% to 10,475.68, Singapore’s Straits Times Index added 0.34% to 2,983.17, Taiwan’s Taiex gained 0.13% to 8,552.64 and Hong Kong’s Hang Seng Index opened 0.6% higher at 22,727.04.

The Shanghai Composite Index fell 0.51% to 2,863.79 and South Korea’s Kospi lost 0.27% to 1,944.54.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi said he expects the FBM KLCI to remain volatile in the short term and very bearish in the medium term.

As a result, very short-term was the key to the markets.

“We suggest that clients liquidate on rallies and remain more in cash (as there are very few price defensive counters).

“Due to the global market malaise recently, we will see the FBM KLCI in a much weaker posture today. We expect the market to remain weak as the foreign hedge fund money exits Malaysia,” he said.

Meanwhile, BIMB Securities Research said given the hanging concern in Libya as crude oil may continue to be under pressure, it did not expect the buying sentiment will resume anytime soon.

“Hence, expect the selling pressure to continue today albeit at mild momentum,” it said.

On Bursa Malaysia, Paramount was the top gainer in early trade and rose 36 sen to RM4.87; Far East added 39 sen to RM7.40, Tradewinds rose 27 sen to RM7.83, Lysaght 20 sen to RM1.90, MISC and Shell 18 sen each to RM7.63 and RM10.48, RHB Capital 17 sen to RM7.97 and Amway 14 sen to RM8.50.

Carlsberg rose 24 sen to RM6.54 after its net profit rose 51.8% to RM30.49 million in the fourth quarter ended Dec 31, 2010 from RM20.09 million a year ago, driven by higher export and contract manufacturing sales.

It announced a final gross dividend of 7.5 sen per and special gross dividend of 43 sen share.

Losers in early trade included Batu Kawan, QSR Brands, KrisAssets, JT International, Malaysia Smelting Corp , AMMB and Hong Leong Bank.

Tanco was the most actively traded counter with 24.89 million shares traded. The counter added four sen to 38 sen. Other actives included HWGB, Transmile, SAAG, KNM, Ramunia and Olympia.


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