Barefoot Investor: KLCI snaps winning streak, muted response to Budget 2012

The FBM KLCI snapped its positive run and slipped at mid-morning on Monday, Oct 10 as the market appeared to show muted response to the 2012 Budget tabled last Friday, indicating that external factors still weighed on investor sentiment.

Regional markets were mixed, as investors await inflation and other economic data from China this week as Chinese markets reopen following Golden Week holidays.

At 10, the FBM KLCI slipped 3.08 points to 1,396.97, weighed by losses at select blue chips.

Losers overtook gainers by 148 to 139, while 156 counters traded unchanged. Volume was 140.01 million shares valued at RM84.25 million.

At the regional markets, Hong Kong’s Hang Seng Index fell 0.33% to 17,648.73 and the Shanghai Composite Index shed 0.06% to 2,357.87; South Korea’s Kospi rose 1.16% to 1,780.11 and Singapore’s Straits Times Index added 0.67% to 2,658.00.

Meanwhile, the Japan and Taiwan stock markets were closed for their respective national holidays.

HwangDBS Vickers Research in a note Oct 10 said the market was likely to remain volatile in the near term, adding that it did not expect an upswing to the market resulting from the Budget.

“In the immediate term, the market’s direction will more likely be determined by US growth outlook and Europe debt crisis.

“There is downside to our year-end KLCI target of 1,520 after we recently downgraded earnings for banks and property counters,” it said.

Meanwhile, BIMB Securities Research said it was getting really tiresome on the flip-flopping of sentiments that traders are leveraging on between Europe and the US.

Despite that the European Central Bank had indicated that more liquidity would be injected into the Euro zone financial system, traders had now turned sceptical from being encouraged earlier in the week, it said.

It said that as such, Wall Street’s progress had scuppered despite the encouraging US job figures for September, and that the Dow Jones dipped 20 point on Friday after what was a strong week.

Regionally, Asian bourses were largely positive and so was the local bourse, it said.

“The FBM KLCI closed stronger at just above the 1,400 level indicating that many are rather encouraged with Budget 2012.

“We are hoping this to continue and looking the FBM KLCI to test the 1,420 level further buoyed by a German-French allegiance to starve off a full blown Euro zone crisis,” it said on Oct 10.

On Bursa Malaysia, PPB fell 20 sen to RM15.74, Southern Acids lost 14 sen to RM1.79, Lafarge Malayan Cement 13 sen to RM6.75, Sime Darby 12 sen to RM8.40, Tenaga 10 sen to RM5.28, Mudajaya and Kumpulan Europlus seven sen each to RM2.16 and RM1.02, while Media Chinese International fell five sen to 99 sen.

Tobacco and brewery stocks edged up after being spared any tax hikes in the Budget 2012 unveiled last Friday.

BAT added 46 sen to RM43.96, JT International rose 30 sen to RM6.10, GAB 12 sen to RM10.02 while Carlsberg was up three sen to RM6.49.

Other gainers included DiGi, Toyo Ink, Dutch Lady, Brem, IJM PLANTATION []s and Latexx.

The actives included Karambunai, Dutaland, MBF Holdings, Malton, E&O and MBSB.(


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