Another bout of selling pressure?

OSK Research says it remains neutral on the Malaysian market with a 2012 FBM KLCI fair value of 1,466 points.


KUALA LUMPUR: The stock market could endure another bout of strong selling pressure today as investors may want to keep more cash ahead of the holiday-shortened week.

Still, there may be those who would be looking for bargains or defensive stocks after sharp losses registered in the week just ended.

Trading will only be for the morning session today and the bourse is likely to be shut from Tuesday until Thursday due to the Hari Raya and the National Day holidays.

OSK Research in its report on Friday said it remains neutral on the Malaysian market with a 2012 FBM KLCI fair value of 1,466 points.

The research house said corporate earnings have not been attractive and continue to slide, with both big and small caps sharing the disappointments and downgrades.

"We note that our earnings growth forecast of 12.8 per cent is likely to be pared down, thus causing our FBM KLCI's fair value to be pegged against a higher PER in the coming months," it said.

Stocks that could attract interest include Berjaya Food, due to its proposals to acquire a 50 per cent stake in Berjaya Starbucks Coffee for RM72 million cash and undertake a rights issue involving four rights shares with four free warrants for every five existing shares held at an issue price of RM0.65 each.

On Wall Street, investors were given a sigh of relief, thanks to the much awaited speech by Federal Reserve chairman Ben S. Bernanke who assured the US economy was not deteriorating fast to warrant an additional stimulus.

The Dow Jones Industrial Average jumped 466.89 points, or 4.3 per cent, to end the week at 11,284.54.

Bernanke was quoted as saying that although the central bank have tools to stimulate the economy, most of the burden for ensuring a solid foundation for long-term growth were with the government.