KLCI rally has legs, says Aberdeen Asset

"I believe this rally has legs, barring any unforeseen circumstances like awful news from the US. I hope the rally will last until Chinese New Year at least," said Aberdeen Asset Management Sdn Bhd managing director Gerald Ambrose.

Analysts believe the stability in US stocks, signs of a weakening greenback as well as higher commodity prices are among catalysts for the New Year rally.
"It seems like the short-dollar, long-commodity play is back again," said Jupiter Securities Sdn Bhd head of research Pong Teng Siew.
TA Securities head of research Kaladher Govindan added that tension in Middle East will drive crude oil prices higher. Stronger demand for commodities, including crude palm oil, will also give local plantation companies a reason to cheer.
Analysts advised investors to adopt a "trading approach" for the time being. This means that investors should be ready to sell whenever they see price weakness, Pong explained.
The year-end forecast of the local market varies, as the outlook of the global economy is still uncertain.
"We expect the rally to cool down (for a while), but it will pick up again. We expect the index to hit 1050 (points) in the first quarter, and retract to 600-750 level before ending the year at the 850 level," said Kaladher.
Pong, who does not have a year-end forecast on the local market, has a mid-year target of 1,000 points for the KLCI.
OSK-UOB Unit Trust Management Bhd chief executive officer Ho Seng Yee, in an event in Kuala Lumpur yesterday, said the KLCI was expected to trade between 850 and 960 this year.