August a firmer month (ext: Edge)

Stocks could kick off the new month in August on a firmer month, underpinned by fund buying of big capitalised stocks as the RM10 billion Amanah Saham 1Malaysia fund gets underway.

The biggest beneficiaries would be liquid big capitalised companies on the 30-stock FBM KLCI including BCHB, Maybank, Tenaga, Sime Darby, Telekom and Axiata.

For instance, filings to Bursa Malaysia showed that the Employees Provident Fund acquired 9.4 million shares of Axiata on July 23 and 24, raising its shareholding to 17.08% or 1.44 billion shares.

Despite uncertainties from external events, for the month of July, the FTSE Bursa 100 rose 9.58% or 673.79 points to 7,706.05, leading the 30-stock FBM KLCI which rose 8.92% or 96.19 points to 1,174.9. Market capitalisation increased RM68.15 billion or 8.33% to RM885.83 billion.

On Wall Street, the S&P 500 ended its best five-month streak since 1938 with a slight gain on Friday, July 31 as government data showed softness in consumer spending but reinforced expectations that the economic slump is abating.

The US economy contracted at a slower-than-expected pace in the second quarter, government data showed, but a sharp drop in consumer spending fanned fears that recovery would be sluggish.