Market Close KLCI ends flat in cautious trades ahead of election

Market Close KLCI ends flat in cautious trades ahead of election
Business & Markets 2013
Written by Chong Jin Hun of theedgemalaysia.com
Monday, 22 April 2013 17:17


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KUALA LUMPUR (April 22 ): The FBM KLCI which opened at its day's low had vacillated between gains and losses before ending flat. This came amid cautious domestic pre-election sentiment and gains in regional markets.

At 5pm, the KLCI rose 0.4 point or 0.02% to 1,706.68 on gains by selected blue-chips such as Genting Malaysia Bhd and MALAYAN BANKING BHD [].

The KLCI had begun the day at its intraday low of 1,702.47 before reaching a high of 1,709.49 at 9.10am.

Across Bursa Malaysia, some 785 million shares worth RM1.35 billion changed hands. There were 212 gainers versus 463 decliners.

The top gainer was JERASIA CAPITAL BHD [] while NESTLE (M) BHD [] led decliners. The most-active stock was SOLUTION ENGINEERING HOLDINGS [] Bhd.

Analysts see cautious sentiment "ahead of the polling day" in Malaysia on May 5 this year.

Hong Leong Investment Bank Bhd research head Low Yee Huap said given the strong foreign interest and high cash holdings of domestic institutional funds and retailers, market weakness ahead of the election is expected to offer bargain-hunting opportunities and cushion any sharp fall in the KLCI.

This comes amid anticipation that the KLCI may play catch-up against regional bourses’ strong year-to-date gains once the election risk in Malaysia is removed, Low said.

TA Securities Holdings Bhd analyst Stephen Soo said the KLCI's overbought technical momentum and weakening trend indicators suggest that the current uptrend for the benchmark is waning.

Hence, Soo expects further profit-taking this week until the overbought momentum is neutralised.

"Moreover, weak buying momentum last week, as most investors were sidelined ahead of the nomination of candidates for the 13th general elections, suggests that the current subdued trading sentiment could persist up to election day," Soo wrote in a note today.

Across Asia, Japan's Nikkei rose 1.89%, Hong Kong's Hang Seng added 0.14% while Singapore's Straits Times rose 0.4%

Reuters reported that Japanese shares powered to nearly 5-year highs and determined sellers just failed to breach the symbolic 100 yen/dollar level on Monday, even though the Bank of Japan's bold reflationary plans were endorsed by the Group of 20 gatherings in Washington.