KL stock market expected to be quiet this week

Volumes are expected to dry up ahead of some IPOs next month as investors look to pick the shares once they are listed, says a research head


THE local stock market is expected to be quiet this week with the key index on a slight upward bias, ahead of some big listings soon.

"Generally, the market will be quite quiet this week. Volumes are expected to dry up ahead of some IPOs next month as investors look to pick the shares once they are listed," said Chris Eng, head of research at OSK Research Sdn Bhd.

Felda's sugar unit, MSM Malaysia Holdings Bhd and Bumi Armada Bhd are expected to be listed in the next few weeks, while property developer UOA Development Bhd will be listed on June 8.

Stocks like Tenaga Nasional Bhd (TNB), RHB Capital Bhd and Sime Darby Bhd may be in focus this week.

Analysts say there could be further upside to TNB's shares should the government approve an electricity tariff hike this week. The shares, which had rallied earlier last week, closed 28 sen higher to RM6.58 last Friday.

All eyes will be on banking group RHB Capital, amid a report that its 30 per cent strategic shareholder Abu Dhabi Commercial Bhd (ADCB) may decide on a buyer for its stake after an ADCB board meeting tomorrow.

RHB Capital last closed 2 sen lower at RM9.27.

Investors may find favour with conglomerate Sime Darby after it said last Friday that it is exiting its loss-making oil and gas business as part of a plan to boost profits. It also expects to beat its profit target for the full financial year.

The stock last closed 2 sen higher at RM9.13.

The FBM Kuala Lumpur Composite Index, which closed at 1,548.69 points last Friday, may find support at 1,517 and see resistance at 1,565, Eng said.

The FBM KLCI index has risen by just 1.4 per cent so far this year.

"Looking ahead, notwithstanding concerns about the strength of the US and the EU economic growth, we believe the market will be driven by merger and acquisitions, corporate restructuring and to some extent, the follow-through from earlier-announced Economic Transformation Projects.

"This is further supported by decent market earnings growth of 11.3 per cent and 12 per cent for 2011-2012," RHB Research Institute said in a report last Friday.