Profit-taking to continue as outlook improves

PROFIT-TAKING activities are expected to
continue on Bursa Malaysia this week but the market direction may take a
turn for the better, in line with encouraging financial results by
companies.

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The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) is expected to trade
range-bound at between 1,760 and 1,780 points this week.


Market direction will hinge mainly on reaction to external news flow and
the outcome of the first quarter 2013 results reporting season, which
will conclude by Friday.

Better-than-expected consumer
sentiment in the United States helped strengthen Bursa Malaysia to end
higher early last week. Excessive profit-taking activities led to a
mild correction as investors cashed out ahead of the Wesak Day holiday
weekend.

The medium-term local sentiment is increasingly
improving on stronger fundamentals and post general-election sentiment.
Any correction should be temporary before the uptrend resumes.





The local market is expected to end profit-taking activities, possibly after the long school holidays.

Trading momentum is also likely to accelerate after local stocks consolidate strong gains.

Softer
commodities are likely to drag down local equities with light crude oil
and crude palm oil down week-on-week at 3.3 per cent and 4.1 per cent,
respectively.

For the past two weeks, giants like like Maybank,
Public Bank, CIMB, IOI Corporation, KL Kepong, Tenaga Nasional, Axiata
Group, Maxis, Petronas Gas and Petronas Dagangan reported earnings that
largely came within consensus expectations.

In the next few
days companies like Sime Darby, Genting and Petronas Chemical are
expected to announce their results which could have a bearing on the
market direction.

Investors could pick stocks in the
construction and oil and gas sectors, such as Alam Maritim, Benalec, TRC
Synergy, SapuraKencana, or banks and services companies such as Public
Bank, AmBank, Maybank, TNB and Astro.

During the week that just
ended, the FBM KLCI outperformed the previous all-time-high of 1,788.43,
with an intra-day high of 1,795.59 on May 22 in tandem with the
sterling performance of regional markets.

However, the market
lost its momentum on Thursday, ahead of the Wesak Day holiday, on
profit-taking as losses on regional markets spooked investors.

On a week-to-week basis, the FBM KLCI ended 3.90 points higher at 1,773.06 from 1,769.16.

The Finance Index increased 27.37 points to 16,776.38 from 16,749.01 previously.

The
Plantation Index improved 60.65 points to 8,289.95 from 8,229.30 while
the Industrial Index declined 23.78 points to 3,000.67 from 3,024.45.

The FBM Emas Index increased 44.50 points to 12,316.68 from 12,272.18,
with the FBMT100 Index gaining 35.86 points to 12,090.36 from 12,054.50
last Friday.

The FBM ACE Index declined 5.04 points to 4,674.37
from 4,679.41 and the FBM Mid 70 Index increased 79.38 points to
14,171.37 from 14,091.99.

Weekly turnover dipped 10.942 billion shares worth RM11.765 billion from 12.677 billion shares worth RM13.261 billion.

Main Market volume slid to 9.378 billion shares worth RM11.478 billion
from 10.65 billion shares valued at RM12.588 billion last week.

The
ACE Market volume fell to 1.315 billion shares worth RM211.266 million
from 1.727 billion units worth RM265.042 million previously.

Warrants declined to 228.938 million units worth RM39.439 million from 272.137 million shares valued at RM35.623 million.