Market Close KLCI gains 1.41% to new high

Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Tuesday, 07 May 2013 17:45
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KUALA LUMPUR (May 7): The FBM KLCI again broke its closing record
to reach 1,776.73 points, gaining 24.71 points or 1.41% . Analysts said
the election outcome was still factored into the rise.
A minute into the trading hours, the bellwether rose 16.2 points to
1,767.82 points before investors pared gains to the day’s lowest level of
1,756.95 points at 9:18 am. The index subsequently moved higher
throughout the day and hit a high of 1,776.73 points.
Leading the KLCI were BRITISH AMERICAN TOBACCO (M) [] Bhd
(BAT), UEM LAND HOLDINGS BHD [] and CIMB Group Holdings Bhd.
Many analysts, including Alliance Research’s Teoh Chang Yeow, said
Barisan Nasional’s (BN) victory in the recently-concluded 13th general
election (GE13) were seen as good news for investors to make profits.
A victory for BN is seen raising positive sentiment as it ensures policies implemented will still remain.
Teoh told theedgemalaysia.com that the benchmark’s steady climb today which was different from the volatile pattern
yesterday was due to “the smaller players choosing to play today”.
“There were some (investors) who did not take part in yesterday's rally. So to them, today’s market was more stable and
there was more room to play.
“With the outcome of GE13 seen as good news, they choose to be on the buying side. This explains why the market
continued to rise after morning trades,” said Teoh.
He said the support level for the KLCI tomorrow will be in the 1,743-point region and resistance at the intraday high record of
1,826 points achieved yesterday.
Another analyst said local funds were buying today as many chose to be on the sidelines before GE13.
“(Local funds) are currently cash-rich as they had been net sellers before the elections. Now, they don’t want to miss out on
this rally," the analyst said.
The analyst also said while the local stock market had underperformed before the elections, the current valuations are
“pretty steep” compared to its regional peers.
“At the calendar year 2014’s price-earnings ratio, Malaysian stock market is trading at 14.5 times, when most others are
trading at 12 times or below. Only the Philippines’is trading at about 16 times,” the analyst said.
JF Apex Securities senior analyst Lee Cherng Wee said profit-taking activities in the Malaysian bourse should emerge soon.
“With the uptrend, there is bound to be selling pressure. Even the past two days showed there was,” said Lee.
“However, in the longer term, things will still be positive for the local stock market.” he added.
Across the exchange, a total of 2.31 billion shares worth RM4.06 billion were traded. Gainers thumped losers at 717 to 153
respectively.
MALAYSIAN AIRLINE SYSTEM BHD []’s (MAS) rights shares led the most- active list, followed by MAS shares and CIMB.
Top gainers were GUINNESS ANCHOR BHD [], ALLIANZ MALAYSIA BHD [] warrants and BAT.
Top losers included UMW HOLDINGS BHD [], DIALOG GROUP BHD [] warrants and LAY HONG BHD [].
Across the region, Japan’s Nikkei gained 486.2 points or 3.55%, Hong Kong’s Hang Seng inched up by 132 points or 0.58%,
China’s Shanghai Composite closed 4.46 points or 0.2% higher and Singapore’s Straits Times gained 0.87 points or 0.03%.
Australia’s ASX 200 lost 12.47 points or 0.24% while South Korea’s Kospi closed 7.13 points or 0.36% lower.
Reuters reported that Asian shares were capped on Tuesday by caution over weak global growth data, but renewed hopes
for a steady US recovery propelled Japanese equities to a near five-year peak.