Monday, April 26, 2010

Investor sentiment on Bursa to brighten

Fears over Greece's loan default eased after the nation asked for financial aid while positive earnings' report by US firms last Friday pushed stock prices higher.

Last Friday, Greece officially asked the European Union and the International Monetary Fund for US$53 billion (RM170 billion) to aid the debt-stricken country.

Meanwhile, US stocks advanced late last Friday due to mostly positive corporate earnings with the Dow Jones Industrial Average gaining almost 70 points to 11,204.28 and the Standard & Poor's 500 Index rising 8.61 points to 1,217.28.

Apart from the US earnings season, China's efforts to tame its property market and Greece's debts issues, local investor sentiment will also be driven by the outcome from the Hulu Selangor by-election.

"A key catalyst for the week will be the Hulu Selangor by-election. If Barisan Nasional wins by a significant majority, which means over 1,000 votes or more, it will bring about greater confidence (in the ruling coalition and market sentiment)," said OSK Research head Chris Eng.

He added that market volatility on the local bourse is expected to continue in the next four months or so, with the benchmark index trading between 1,331 points and 1,338 points this week.

Interest in selected banking stocks such as Hong Leong Bank Bhd and EON Capital Bhd (EONCap) is set to continue this week, with oil and gas players also benefiting from rising crude prices.

Hong Leong told Bursa Malaysia on Friday that it had submitted its improved RM5.06 billion cash bid for EONCap to Bank Negara Malaysia and was also planning to raise up to RM1.6 billion from a renounceable rights issue and RM1.8 billion from the sale of capital qualifying securities.

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) ended marginally lower by 0.23 point to 1336.78 points on Friday, with losers beating gainers 352 to 305. Asian stocks also fell on Friday on concerns over Greece's debt problems and as investors remain cautious over the Chinese government's measures to cool its property market.

Market volatility continued on the local bourse with the index sliding some 6.1 points to 1326.67 points last Monday due to selling pressures as investor confidence was shaken over civil fraud charges filed against Goldman Sachs.

However, the FBM KLCI gained its footing the next day, rising some 9.23 points by the end of market trade.

The best performing index member over the week was MISC Bhd, which saw its share price gain 4.17 per cent to end at RM9, after AmResearch upgraded the stock to a "buy" from a "hold" in line with a recovery in tanker rates.

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