Sunday, 3 July 2011
Exchange Weekly: FBM KLCI hit its highest level
Composite Index FTSE Bursa Malaysia (FBM) rose and closed at new record levels last week.
It is stimulated by events 'decorate account' for the first half of the domestic market and foreign market rally after a major borrower agreement to settle 70 percent of government debt when Greece has enacted measures to continue the relief efforts.
Consequently, the FBM 18:28 KLCI gained points, or 1.17 percent last week to close at new record high of 1,582.94, with the increase in CIMB (+25 cents), Hong Leong Bank (+82 cents) and Gamuda (+20 cents) contributed about 40 per cent increase index. The average daily trading volume and value in their margin decreased to 903.5 million shares worth RM1.65 billion, compared with an average 920.4 million shares worth RM1.53 billion last week. We began to enter the second half
of this year and the author expects the benchmark index to the highest recorded level during the period. Target 1.730 index points by the end of the year is mid-cycle can be achieved by 2011/2012 PER of 16 times. Factors generating the index is out of the economic environment improves, especially in the United States (U.S.) and Japan , as well as domestic injection step through private sector initiative under the Economic Transformation Program (ETP). No doubt we will see a precarious position on the global stage with a number of political issues in West Asia and European government debt problem plagues the market. slow China's Economy triggered internally will increase anxiety, but the official growth target of eight percent for 2011 and seven per cent between 2011 and 2015 will still be able to support global growth. Approval of parliament Greece to bailouts worth 78 billion euros, enabling the country to obtain the initial charge of 11.8 billion International Monetary Fund (IMF) and the European Union rescue program. It will pave the way for another mega rescue package worth over 110 billion on Monday. Positive developments will boost the global equity markets, which had already increased last week. In addition to short-term solution to the problem of Greece, the U.S. market also reacted positively to the continuous increase in the production index of the Institute for Supply Management (ISM) to 55.3 points last month , better-than-expected decline in 52 points over the figure of 53.5 points in May. Although a new high level seen last week is expected to trigger profit taking this week, the positive news flow from overseas markets will be able to control any sales pressure. Results of Bank Negara Malaysia on Overnight Policy Rate (OPR) on Thursday will be closely monitored. Forecast is that it will be increased 25 basis points to 3.25 percent. The writer thinks the Bank will pause in the cycle to balance the effect of several measures taken so far. In addition, prices of some commodities that have been stabilizing over the last month to absorb the price pressure on future. strategy to forward the opportunities of the weaknesses involved in the next rally. Heavyweights and government-linked companies should be seen as an opportunity to good long-term investment. Protests 'Net Rally' this week may put pressure on the market decrease flow if the feedback from other non-governmental organizations gain momentum and concern over untoward incident during the grand parade takes place. The author believes that the situation occurred again in the near term to imply general election expected this year. Strengthening regional markets boosted by positive economic data, while the debt crisis and solutions Greece after the rescue measures policy makers to continue the flow of aid to be overshadowed by taking account of the decorating activities last Friday. Trading on the KLCI to grow to 22.62 points last week, compared to only 9.83 points the previous week, mainly due to events decorating in the blue-chip accounts. In conclusion, the trend indicators continue to rise to the continuous rise in the KLCI signal, but signals an overbought on a large scale in the daily and weekly momentum indicators show the correction on profit taking is expected to occur this week. Therefore, investors may tend towards appropriation or doing sales on the strength of blue chips such as AirAsia, CIMB and Gamuda before the correction. In another development, Genting Bhd, Genting Malaysia and RHB Capital seems very attractive to buy up the recent poor performance for long-term profits. Meanwhile, shares of MRCB, DRB-Hicom, Dialog, KNM Group and Shield Petroleum is expected to record profits in the future is preferred.