KUALA LUMPUR: Fund buying of big capitalised stocks, particularly banks and plantations, pushed the local market to an 11-month high on July 15, mirroring the surge in equities in other regional bourses, on the belief that the global recession may have ended and expectations of an economic rebound next year.

Singapore was the top performing market on the back of the island state’s economy snapping out of a recession, with its key Straits Times Index surging 3.41% to 2,389.42.

Hong Kong’s Hang Seng Index advanced 2.09% to 18,258.66; South Korea’s Kospi 2.55% to 1,420.86, Taiwan’s Taiex Index 1.49% to 6,738.6, Shanghai’s Composite Index 1.38% to 3,188.55 while Japan’s Nikkei 225 rose 0.08% 9,269.25.

On Bursa Malaysia, the 30-stock FBM Bursa Malaysia KLCI surged 1.63% or 17.61 points to 1,097.24, the highest level since Aug 29 last year, after hitting an intra-day high of 1,104.87.

The marked improvement in sentiment was also seen in the surge in trading volume, which rose 73% to 1.37 billion shares from 788.98 million units on July 14. The broader market was also firmer, with advancing counters beating decliners nearly five to one.

The markets were given a boost as Asian economies showed further evidence of a rebound. According to a Reuters’ poll, China is on track to reach its 8% growth target this year, while Asia’s worst hit economies Singapore and Taiwan would see a sharp turnaround next year as the continent rebounds.

Nonetheless, the report said while this year would be Singapore’s worst-ever and Taiwan’s weakest performance since records began in the 1950s, the worst did appear to be over for the export-reliant economies.

Both will see the sharpest turnaround in Asia from recession to growth next year, according to the Reuters poll which covered estimates from more than 100 analysts in 12 economies.

Malaysia and Thailand should enjoy a modest rebound next year, of 4% and 3% respectively, after struggling with weak exports this year, it said.

Investors’ sentiment was also given a boost from better-than-expected earnings from some key US companies overnight including Intel Corp and Goldman Sachs.

Merrill Lynch Research said in a report that its global economists believed the global recession ended in the second quarter and a fragile recovery had begun in the third quarter.

“We are revising growth forecasts up virtually across the globe, but most notably in the US and China. We raised our second-half 2009 forecast for the US economy to an above consensus 2.7%, and to 2.6% for 2010. And we revised the 2010 China forecast up to 9.6%.

“We increased the 2010 global GDP growth to 3.7%, with GDP growth in the emerging markets at 5.5% forecast to outperform growth in developed markets at 2.2%,” it said.

AmResearch Sdn Bhd head of research Benny Chew Yow Leng told The Edge Financial Daily that the FBM KLCI was moving in tandem with the strong regional markets’ positive sentiment.

However, he said the research house was maintaining its 1,190 forecast for the FBM KLCI for early next year, adding that fundamentals had not changed very much.

“There will be a pull-back in the near term, meaning over the next one to two months, as the market is still volatile. Earnings turnaround will be from early next year, so we expect some stabilisation then,” he said.

The ringgit also strengthened against the US dollar on July 15 and was quoted at 3.5630 per dollar at 5pm versus 3.5825 the previous trading day.

Plantations also extended their recovery, with crude palm oil up RM75 per tonne to RM2,115 for August delivery and RM67 per tonne to RM2,103 for September delivery. Crude oil gained 95 cents per barrel to US$60.47 (RM215.88) as at 6.40pm on July 15.

On Bursa Securities, among the major gainers were Malayan Banking Bhd and Public Bank Bhd whichrose 25 sen each to RM5.90 and RM9.95, respectively, while Bumiputra-Commerce Holdings Bhd advanced 20 sen to RM9.70.

AMMB Holdings Bhd added 16 sen to RM3.68, Genting Bhd rose 10 sen to RM5.65, while Sime Darby Bhd and MMC Corporation Bhd gained 15 sen each to RM7.35 and RM2.30, respectively.

Other major gainers included Axiata Group Bhd, IOI Corporation Bhd, Genting Malaysia Bhd and Tanjong Plc.

Ewein Bhd was the top loser on July 15 and fell 28 sen to 90 sen; British American Tobacco (M) Bhd lost 25 sen to RM44.75, DiGi.Com Bhd fell 20 sen to RM22 and Parkson Holdings Bhd fell 16 sen to RM4.94.

KL Kepong Bhd, Top Glove Corporation Bhd and Quality Concrete Holdings Bhd fell 10 sen each to RM11.90, RM7.35 and RM1, respectively. KNM Group Bhd was the most actively traded counter with 110.4 million shares done. The stock gained 8.5 sen to 83.5 sen.