Market Review

Higher finish. The FBM KLCI inched up 1.87 pts to 1,513.84 pts yesterday. In the news is SEGi, which announced a dividend policy to distribute a minimum of 50% of its net profit effective FY11, Wah Seong will set up a JV with PT Agrindo Prima Lestari to manufacture industrial fans and blowers for the palm oil industry and other industries utilising similar products in Indonesia, Transmile has completed the disposal of 4 of its aircraft to Federal Express Corp for USD67m (RM200m) while the payment due from Syarikat Bekalan Air Selangor SB (Syabas) to Syarikat Pengeluar Air Sungai Selangor SB (Splash) has been reduced to 42% from 45% effective 1 March 2011. Finally, the US markets ended higher but the crude oil price fell USD0.15 to close at USD105.60/barrel.

Market Review

Broadly higher. The FBM KLCI ended nearly 3 points higher yesterday at 1511.97 points. Market breadth continued to be very positive, with 515 gainers against 251 losers. This was despite regional market being mixed yesterday following the Dow's mild decline. Today’s news headlines are Tenaga acquires a 22.1% stake in Integrax for RM106.5m and is now the single largest shareholder, Hai-O Enterprise reports a RM6.3m 3QFY11 net profit against RM18.0m last year, BNM believes the local economy can grow at 6% this year, and Sime Darby settles its dispute with Maersk Oil Qatar and will write back RM100m to its profit & loss account. The Dow jumped 67 points overnight, which should help local stocks gain more ground today.

Technical View

Yesterday’s 5-pt rebound keeps alive the possibility of the FBM KLCI trending sideways. There is still potential for the market to consolidate between the 1,474 pt-level and the 1,530 pt-level. We will stick to this view until either one of these two levels is violated. As we mentioned yesterday, although the recent violation of the short-term uptrend line wrote off the possibility of the index creating a new uptrend in the near-term, it is still possible that the impressive rebound on 28 Feb 2010, which resulted in the creation of the “Long Lower Shadow Line”, could still overturn the previous downtrend channel into a sideways trend.

We would still like to highlight the importance of the 1,474 pt-level. As shown by the four circles in the above daily chart, every previous test of the 1,474 pt-level had been followed by a strong rebound subsequently. It was also apparent from the latest test of the 1,474 pt-level on 14 March 2010 when the index fell by about 15 pts at the day-low but rebounded when it was trading about 6 pts away from the critical 1,474-pt horizontal support line. That day, the index even bounced back with marginal gains but eventually ended the day with a loss of 0.27-pts.

Meanwhile, we maintain our bullish bias. Within the potential sideways range, look for an immediate resistance at the 1,509-1,517-pt “Downside Gap”. Next resistance is situated at the 1,530 pt-level but to the downside, there is immediate support at the 1,490 pt-level, followed by the critical 1,474 pt-level

Market Review

Higher close. The FBM KLCI gained 5 points yesterday to close at 1508.88 points led by Genting, MISC and Tenaga. This was in tandem with the rebound in the regional and global bourses yesterday. It was encouraging to note that the market breadth was decidedly positive, with 587 gainers against 200 losers. Today’s news headlines areHarbour-Link Group receives an LOI for a RM29m civil works contract at SamalajuIndustrial Park in Sarawak, Benalec Holdings receives a letter of award for earthworks, river protection works and other related works in Klang worth RM37m, while Tan Sri Azman Hashim denies looking to sell his stake in AMMB. Overnight, the Dow retook the 12,000-point territory by climbing 178 pts while the European bourses surged 1% to 2% as the attacks on Libya progress into the third day. Crude oil also rose by about USD1 per barrel to USD102. With the positive overseas influence, Malaysian stocks will likely rally further today. Immediate resistance is seen at the range of 1509 – 1517 points.