Asian markets remained in positive territory at midday

KUALA LUMPUR: Asian markets remained in positive territory at midday following the Federal Reserve’s latest push to bolster the US economic recovery.

Essentially, the US policymakers – while leaving interest rates unchanged – have stated its intention to purchase a further US$600 billion of longer-term Treasury securities by end of second quarter 2011 in a bid to reduce unemployment and avert deflation.

This is slightly higher than market expectations, which then pushed up key equity indices on Wall Street by between 0.2% and 0.4% at the closing bell.

Analysts expect a lift in sentiment across Asia today following the decision.

“Consequently, the benchmark FBM KLCI will probably show a slight positive bias ahead, making its way towards the resistance target of 1,525,” HwangDBS Vickers Research said in a note.

The FBM KLCI rose 3.07 points to 1,510.67 on Thursday midday trade.

Meanwhile Asian markets were up at midday.

Japan’s Nikkei 225 rose 2.04% to 9,347.23 while Shanghai’s A share index added 1.32% to 3,070,97.

Hong Kong’s Hang Seng index added 1.18% to 24,429.71 and Singapore’s Straits Times Index gained 0.13% to 3,229.21.

At Bursa Malaysia, 372 counters were up, 310 were down while 299 remained unchanged. There were 694.9 million shares done at a total value of RM729.6 million.

Among the top gainers Kulim jumped 58 sen to RM11.88, Boustead rose 21 sen to RM5.83 and Pansar added 16 sen to 66 sen.

QSR rose 19 sen to RM5.50, QL Resources added 15 sen to RM5.76 and Integrax gained 13 sen to RM1.46. Meanwhile, the international reserves report as at Oct 29 – to be out this evening – would give an update on the latest fund flows pattern following a sizeable fortnightly increase of US$4.8bil in the second half of September and US$3.9bil in the first half of October.

In terms of corporate development, UEM Land has offered to buy all Sunrise shares at RM2.80 each via the issuance of new UEM Land shares or redeemable convertible preference shares.

Nymex crude oil was 62 cents higher at US$85.31 per barrel.

The ringgit was quoted at 3.0830 to the US dollar.

Source: http://biz.thestar.com.my/news/story.asp?file=/2010/11/4/business/20101104101822&sec=business

Positive market outlook

PETALING JAYA: Liquidity and a strengthening ringgit are the key forces propelling the FBM Kuala Lumpur Composite Index (FBM KLCI) in the last few months. Now, as concerns of a double-dip recede, along with economic reforms by the Government and the possibility of general elections next year, analysts are becoming more positive on the market’s outlook.

OSK Research Sdn Bhd research head Chris Eng said the outlook for 2011 had improved, with corporate earnings continuing to increase.

“We also have the possibility of the general elections to look forward to. Elections are normally held when the economic prospects are a lot more sound,” said Eng.

He added that the Government had implemented various reforms which seemed to be supportive of the economy and the market as a whole.

On a year-to-date basis, the FBM KLCI was up 18.21% to close yesterday at 1507.60. Over the same period, the ringgit has strengthened close to 10% at approximately 3.087 to the dollar.

Standard & Poor’s Malaysia Sdn Bhd director Alexander Chia said the market was partly being driven by liquidity with the strength of the ringgit a function of this liquidity.

In addition, recent concerns for a double-dip recession had receded somewhat, while positive numbers from China had helped to return confidence to investors.

Markets also got a boost from strong manufacturing figures from China and a general increase in risk appetite ahead of the much-anticipated Federal Reserve meeting yesterday.

China’s Project Management Institute for October came in at 54.7, better than the 53.8 that was expected and the 53.8 in September.

JF Apex Securities Bhd deputy managing director Lim Teck Seng said retailers were starting to return to the market.

“Liquidity is not linked to fundamentals. Eventually fundamentals will dictate,” he said.

“But, for now, there are many people holding cash, and bank lending is relatively easy. Hence, people are putting their money to work through equities and property. The market should be relatively safe over the next six months.”

Lim added that foreigners were coming because Malaysia’s interest rates were moving relatively higher than its regional neighbours.

The overnight policy rate was up by 25 basis points respectively in March, May and July to 2.75%.

“We are positive until the first half of 2011. For the second half of 2011, we will have to look at global numbers,” Eng said, adding that he would turn buyer in December, as he was expecting some correction this month.

“With the continued global quantitive easing, and the slower growth in the West, foreigners realised that there is much better growth here,” he said.

Chia, meanwhile, added that he was buying on dips. He expects more upside for the market in the next six to 12 months.

Palm oil stocks grease up FBM KLCI

KUALA LUMPUR: The FTSE Bursa Malaysia KL Composite Index (FBM KLCI) climbed on Wednesday, led by plantation stocks on higher palm oil prices and optimism that the upcoming Budget 2011 to be tabled this Friday may contain additional incentives to lure new investment and boost the economy.

At 9.35am, the benchmark index advanced 5.77 points, or 0.4% to 1,492.34 points. Rising stocks led losers 273 to 88, while 163 counters were unchanged.

“Essentially, amid signs of resilience and with market momentum still on the upside, we reckon the FBM KLCI could be on its way to test the immediate resistance target of 1,495 ahead,’ HwangDBS Vickers said in its morning note.

Palm oil planter Kuala Lumpur-Kepong climbed 14 sen, or 0.8% to RM18.02 - the stock’s highest in more than two years. Rivals IOI Corp rose 9 sen, or 1.6%, while diversified group Sime Darby gained 7 sen, or 0.8% to RM8.83.

Crude palm oil (CPO) futures on Bursa Derivatives settled at RM2,900 a tonne yesterday, a pull back following 6% surged on Tuesday that lifted the benchmark contract to its highest in 26-month high on Tuesday.

Meanwhile, shares in Star Publications was up 24 sen, or 6.4% to RM3.96 after the newspaper publisher announced a special dividend payout of 52.6 sen yesterday.

Overseas, Japan’s Nikkei 225 index surged 1% to 9,486 points, while key indices in Korea, Singapore and Australia were up by 0.6% each.

On Wall Street. the Dow Jones Industrial was up 10 points, or 0.1% to 11,020 points, but the broader S&P 500 Index gained 0.4% to 1,169 points.

Introduction: KLCI

The Kuala Lumpur Composite Index (KLCI) is a capitalization-weighted stock market index. Introduced in 1986, it is now known as the FTSE Bursa Malaysia KLCI. The enhancements to adopt FTSE Bursa Malaysia Index methodology were implemented on Monday, 6 July 2009.

The FTSE Bursa Malaysia KLCI comprises the largest 30 companies listed on the Malaysian Main Market by full market capitalisation that meet the eligibility requirements of the FTSE Bursa Malaysia Index Ground Rules.
The two main eligibility requirements stated in the FTSE Bursa Malaysia Index Ground Rules are the free float and liquidity requirements as indicated below :-

• Free Float
Each company is required to have a minimum free float of 15%. The free float excludes restricted shareholding like cross holdings, significant long term holdings by founders, their families and/or directors, restricted employee share schemes, government holdings and portfolio investments subject to a lock in clause, for the duration of that clause. A free float factor is applied to the market capitalisation of each company in accordance with the banding specified in the FTSE Bursa Malaysia Ground Rules. The factor is used to determine the attribution of the company’s market activities in the index.

• Liquidity
A liquidity screen is applied to ensure the company’s stocks are liquid enough to be traded. Companies must ensure that at least 10% of their free float adjusted shares in issue is traded in the 12 months prior to an annual index review in December.
It contains 30 companies from the Main Market with approximately 900 to 1000 listed companies. The index has a base value of 100 as of January 2, 1977

Source: http://en.wikipedia.org/wiki/Kuala_Lumpur_Composite_Index