External factors lift M'sian market to all-time high

PETALING JAYA: Better market breadth and improving external factors saw the FBM KLCI close 6.89 points higher to a new all-time high of 1,607.74 yesterday.
Analysts pointed out that the enhanced sentiment and better market liquidity also contributed to the listing of Felda Global Ventures Bhd (FGV) on June 28.
“A
significant chunk of institutional funds was released after the listing
of FGV. Now they are looking for bargains to buy,” said one dealer.
With
the market having consolidated over the last two months, funds may now
be looking to nibble on opportunities, now that the European Union
issue has been temporarily addressed, as of last Friday.
“The
market tone looks firmer. Since the listing of FGV, we have seen some
liquidity return to the market. The lower liners which have been
consolidating for a while, may have some leg up. Chart wise, the price
patterns for the lower liners are looking good,” said TA Securities
technical analyst Stephen Soo.
Before yesterday, the previous
historic high was 1,606.63 on April 3. The all-time intra-day high was
1,611.50 on June 25, which Soo thinks will soon be taken out.
Yesterday, advancing counters beat decliners 390 to 327 while 323
counters were unchanged. Turnover was 1.25 billion shares valued at
RM1.84bil.

[You must be registered and logged in to see this image.] Enhanced sentiment: A significant chunk of institutional funds is released after the listing of FGV, says a dealer — Reuters The biggest gainers for the day was Can-One Bhd (up 50 sen to RM3.08), Sam Engineering & Equipment Bhd (up 39 sen to RM3.39) and Dutch Lady Milk Industries Bhd (up 26 sen to RM35.46).
Bursa Malaysia's robust mood was also supported by yesterday's launch of the initial public offer for Khazanah Nasional's IHH Healthcare Bhd.
According
to Soo, he now has three upside targets of 1,628, 1,640 and 1,650.
“With the end of Euro 2012, we may see a stronger return of more
retailers after nearly a month of distraction and odd-hour sleeping.”
The
external front has been looking better since last Friday, when eurozone
leaders agreed to let their rescue fund inject aid directly into
troubled banks from next year and intervene on bond markets to support
troubled member states. They also pledged to create a single-banking
supervisor for eurozone banks based around the European Central Bank.
An
agreement was also reached on a series of short-term steps to shore up
the eurozone's monetary union and bring down the borrowing costs of
Spain and Italy.
On a less optimistic note, the Institute of
Supply Management (ISM) fell for the first time since July 2009. It
fell to 49.7 from 53.5 in May. The level at 50 separates a
manufacturing expansion from a manufacturing contraction. The consensus
expectation was for the ISM to get a reading of 52.
MIDF head of economics Anthony Dass said that part of the drop was due to slower orders from Asia and Europe.
“Looking
at the ISM data, it showed weakness in new orders and exports. Also,
the deceleration in manufacturing was due to the economy's inability to
sustain the surging production in the first quarter of 2012 as well as
to seasonal patterns that were distorted by the warm winter,” said Dass.

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