Malaysia Market – End of the Day

Asian markets closed almost flat amid mixed economic data. Japan market ended slightly higher by 0.45%, Hong Kong down 0.55% and Singapore up 0.33%.

Investors scooped up shares in plantation firms and oil and gas contractors on speculation that rising commodity prices would benefit these companies.

Share prices on Bursa Malaysia closed slightly lower today on waning interests in heavyweights especially banking counters suffered the most as most investors stayed on the sidelines to await the announcements of major companies' financial results. But, losses were limited on follow-through interests in second- and lower-liners. Shares of companies in the MUI group and Lion group hogged the most active list in early trade despite the lack of any corporate leads.
The benchmark Kuala Lumpur Composite Index fell 0.18 point, or 0.018 percent, to close at 1,022.84. It opened 3.14 points higher at 1,026.16 in the morning. Volume increased impressively by 965 mln shares to 3,196 mln shares. The huge volume was mostly contributed by lower liners such as Compugt, KNM, Scomi and SAAG.The Intra-day Oscillator recorded an average gain of 1,433.50 pts. The oscillator was lingering up and down for the whole day indicating investors traded in hesitation. The Key Indicator (Blue) of the Daily MSO Chart hooked slightly up to 1,185.27 gained 53.24 pts.

On the other hand, Citigroup projected Malaysian corporate earnings to fall 17% this year, which is similar to consensus estimates. “We see further earnings downgrades by consensus as likely post the first quarter 2009 earnings reporting season,’’ analyst Wee Kai Choong said in a report Wednesday.

While the possibility of further contraction would put the cap on stock upside potential, local stocks are still trading at 1.63 times their book value despite rising more than 20% since March, he said.

Meantime, a number of stockbrokers including Maybank Investment Bank had told clients this morning to “sell on strength” and pick up shares at cheaper levels.

Around 9:30pm, U.S. stock futures slid as retail sales unexpectedly decreased in April, companies from ING Groep NV to Applied Materials Inc. reported disappointing earnings and the Bank of England said the U.K. economy faces a slow recovery.

The conclusion: Though market sentiment is still heating but the cautiousness showed by analysts as well as market punters invites concern on the continuity of market strength. Market always traded with more volatility before the bandwagon stops. The problem is: Nobody knows when? (Constructed and shared by Smartbiz)