FBM KLCI at all-time high

KUALA LUMPUR: The local bourse surged to an all-time high of 1,670.16 points intra-day as funds and investors were seen to be on a shopping spree, snapping up indexlinked stocks ahead of the results season.

The FBM KLCI closed at a record 1,666.35. However, the broader market was weaker in line with Asian bourses, with declining stocks on Bursa Malaysia beating advancers 409 to 294 and 338 counters unchanged.

“I think the positive run had been anticipated, backed by the fundamentals. It is still on an evolving rotation with the telecommunication, banking and consumer stocks getting a fair bit of interest,” said Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew.

He said banking stocks were relatively attractive right now as it had rather been muted recently due to the upcoming Basel III framework that would see banks needing higher capital requirement, driving up the cost of lending.

“With the overall price to earnings ratio at about 11.5 times, it (banking stocks) is attractive when compared with the telco industry which some stocks are trading at about 30 times, except for Axiata, which is still the cheapest among the telco stocks. Funds might be positioning themselves now ahead of the upcoming results season, and shifting their funds to more attractive sectors of the market,” he said.

According to him, the centre of attraction yesterday was Astro, which made its debut again after being taken private. The pay-TV operator closed unchanged.

“I wouldn’t be too excited about the performance of the stock on its first day,” he said.

Setting 1,675 points as the immediate resistance, Pong said the support would be around 1,658 for the week ahead.

MIDF Research head of equity Syed Muhammed Kifni Syed Kamaruddin said profit-taking took presence in the afternoon session which erased some of earlier gains, while most regional markets ended in the negative territory.

“The selling pressure was arguably precipitated by the lower openings in Europe due to the failure of the EU Summit to reach an agreement on how Europe’s rescue facility will be used to revive its distressed banks,” he said.