CIMB, Tenaga drag KLCI lower at mid-day

KUALA LUMPUR: The FBM KL CI fell extended its losses at mid-day break on Monday, Aug 22 as CIMB and Tenaga weighed on the index, while key regional markets mostly slipped back into negative territory as investors worried about the sluggish US economic outlook and Europe's festering debt crisis.

Spot gold prices hit a record $1,878.39 per ounce as the shaky global outlook prompted investors to move more money into the safe haven, while oil prices tumbled on hopes Libya may resume full output soon as a six-month civil war seemed to be nearing an end, according to Reuters.

The FBM KLCI lost 13.54 points to 1,470.44 at 12.30pm. Market breadth was negative with 551 losers, 128 gainers and 198 counters unchanged. Volume was 406.19 million shares valued at RM757.67 million.

The ringgit strengthened 0.12% to 2.9762 against the US dollar; crude palm oil futures for the third month delivery added RM23 per tonne to RM3,026, crude oil slipped 23 cents per barrel to US$82.03 while gold rose US$20.25 an ounce to RM1,872.35.

At the regional markets Japan’s Nikkei 225 shed 0.04% to 8,715.58, Hong Kong’s Hang Seng Index fell 0.935 to 19,219.65, the Shanghai Composite Index down 0.49% to 2,521.89, Taiwan’s Taiex lost 0.84% to 7,281.24, South Korea’s Kospi fell 0.59% to 1,734.51 and Singapore’s Straits Times Index down 0.70% to 2,714.62.

On Bursa Malaysia, CIMB fell 13 sen to RM7.79, BAT 36 sen to RM44.88, Lafarge Malayan Cement 28 sen to RM7.02, F&N 24 sen to RM11.62, Genting PLANTATION []s 21 sen to RM6.99, Hong Leon Industries, Hong Leong Bank, PPB and Dutch Lady down 20 sen each to RM3.86, RM12.89, RM17 and RM18.60 respectively, APM 19 sen to RM4.71 and Amway 18 sen to RM9.

Tenaga fell 13 sen to RM5.42 with 3.85 million shares done after RHB Research maintained its Market Perform call on Tenaga with a revised fair value of RM6.10 (versus RM6.50 previously) based on unchanged target CY12 PER of 12 times.

Continued gas supply disruptions in 4QFY11 may lead to elevated generation costs (possibly close to that seen in 3QFY11) as Tenaga is forced to burn more expensive oil and distillate fuels, it said in a note Aug 22.

“We gather the gas supply bypass for Petronas’ Bekok C field has been delayed from Aug to Sep (every one month delay could erode FY12 earnings by RM250 million or 10%).

“Taking into account higher generation costs in 4QFY11, FY11 earnings cut by 38%. FY12 earnings trimmed by 9% to take into account the one-month delay for the bypass,” said the research house.

MUI Industries was the most actively traded counter with 23.9 million shares done. The stock rose four sen to 20 sen.

Other actives included Axiata, DVM, E&O, CIMB, Petronas Chemicals, Sime and MAS.

Gainers included Tradewinds, Nestle, Ogawa, Jaya Tiasa, Daibochi, CI Holdings, Spritzer and Notion.