Business & Markets 2012
Written by surin murugiah of theedgemlaysia.com
Saturday, 31 March 2012 19:20
KUALA LUMPUR (March 31): Profit taking might chip off some gains from the FBM KLCI next week after the index came very near to surpass its all-time high on the final trading day of the first quarter of 2012 last Friday.
The local index advanced in line with the positive sentiment at global markets.
World stock markets advanced o n Friday, posting double-digit gains for the quarter, as economic reports showing U.S. consumer spending and sentiment still on the rise helped buoy stock prices and undercut the desire to hold bonds, according to Reuters.
MIDF Research head of equity Syed Muhammed Kifni said that as expected, buying support emerged late Friday on account of quarterly window dressing.
The benchmark FBM KLCI recorded a fresh 2012 year high of 1,596.33 points but nonetheless it failed to break, by a whisker, the all-time high of 1,597.08 points.
Syed Muhammed said he anticipates the market to trade lower early next week as some investors could be cashing in on Friday’s price rise.
However, he said that the underlying market sentiment should remain positive as the liquidity flow into the market is expected to stay healthy.
He said the positive money flow was expected to continue to be sustained by the relentless ‘risk-on’ mood among the foreign funds.
Syed Muhammed said Bursa data showed that they foreign funds) have been net buyers of the local equity market for the past 30 consecutive trading days until last Thursday, and the streak may well continue unbroken next week.
“Hence we are sanguine on the ability of the KLCI to retest its all-time high of 1,597.08 points towards the later part of next week.
“Technically, we pegged the immediate resistance and support levels for FBM KLCI next week at 1,600 points and 1,585 points respectively,” he said.
Among the stocks that could be in focus are UMW HOLDINGS BHD [], PROTASCO BHD [] and CypARK RESOURCES BHD [].
Petroliam Nasional Bhd has extended its oil and gas services contract with UMW by another two years in a deal valud at about US$105 million RM321.8 million).
UMW said on Friday that it would continue to offer its jack-up drilling rig known as “Naga 3” to Petronas Carigali Sd Bhd which is the exploration arm of the national oil company from March 222 this year till March 21, 2014.
Protasco will offer its expertise to the Kuala Lumpur City Hall under a five-year agreement from March 30, 2012 to Marc 29, 2017.
Protasco will be offering to engineering and capacity building services to the KL City Hall.
Cypark could continue to advance and extend it gains from Friday on its upbeat outlook for solid waste management and renewable energy business.