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The FBM KLCI reached fresh highs yesterday, bucking the trend in the rest of the region which saw other key Asian markets weighed down by concerns of the formation of asset bubbles in China.
Analysts said the local bourse could still steam further ahead, driven by interest in lower-liner stocks, sectoral plays and a good start to the earnings season, with PUBLIC BANK BHD [reporting a 3.7% year-on-year rise in net profit to RM678.23 million in its fourth quarter ended Dec 31, 2009.
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The FBM KLCI succeeded in staying above the 1,300-point level, ending 6.27 points higher at 1,306.62, the highest since March 2008.
It made a new 52-week high of 1,307.94 in intra-day trading. Market breadth was, however, negative, with losers outstripping gainers around seven to five.
Jupiter Securities head of research Pong Teng Siew said the market could see further upside at least for the next one to two months.
“It is a bull market, boosted by the low interest rate environment, and the general move of funds into emerging markets,” he told The Edge Financial Daily.
He also said the market was seeing an expansion in price-to-earnings ratios, adding investors had become more confident and were now willing to pay higher prices.
Momentum in the local market would probably last until the second quarter of the year, when a correction, due to the “chorus of worry on China’s overheating problem” could set in.
Meanwhile, PUTRAJAYA PERDANA BHD, whose parent UBG BHD is set to be taken over by PetroSaudi International, was the day’s top gainer, adding 78 sen to RM4.70.
Other top gainers were glovemaker HARTALEGA HOLDINGS BHD and Axiata Group Bhd, which rose 43 sen and 21 sen to RM7.63 and RM3.43, respectively.
Pong said while the glovemakers had seen a good run-up in their share prices of late, investors had become more discerning and would likely stock-pick rather than buy into all companies in the sector.
Top losers were Nestlé (Malaysia) Bhd, which lost 40 sen to RM33.90, FIAMMA HOLDINGS BHD, which shed 27.5 sen to 68 sen, and Tanjong plc, which closed 22 sen lower at RM17.60.
Among the most active stocks were KYM HOLDINGS BHD, which announced on Tuesday that an agreement with Vale International SA for it to sell 16 parcels of land to the Brazilian company for RM101.87 million had become unconditional. KYM rose 17.5 sen to 91 sen with 29.71 million shares traded.
Other active stocks were Axiata, with 25.5 million shares done, and Lion Corp Bhd, which rose two sen to 40.5 sen with 19.75 million shares traded.
The Lion group’s shares had been in the spotlight, due to interest in the steel sector.
In a note yesterday, AmResearch remained overweight on the sector as an anchor reflationary theme, expecting steel demand to accelerate in the coming months, driven by the imminent rollout of regional infrastructure projects, a weak US dollar and potential merger and acquisition newsflow.
Meanwhile, markets around Asia saw downward pressure on reports that authorities in China had told major banks to curb lending for the rest of the month, in an effort to stave off asset bubbles.
The Shanghai and Shenzhen indices were the worst performers in the region, losing 2.93% to 3,151.85 points and 3.67% to 1,191.75 points, respectively.
Japan’s benchmark Nikkei 225 shed 27.38 points, or a quarter of a percent, to 10,737.52 points, while Singapore’s Straits Times Index fell 19.79 points to 2,893.13 points. Hong Kong’s Hang Seng Index declined 1.81% to 21,286.17 points. Korea’s Kospi, however, stayed in positive territory, gaining 4.16 points to 1,714.38 points.
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