Money Flows

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Selling pressure outweighed buying interest on Bursa Malaysia for the week between March 18 and 24. There was an outflow of RM22.98 million from the top 20 stocks on Bloomberg’s selling-on-strength list, substantially larger than the sum of RM3.41 million that flowed into the top 20 counters on the buying-on-weakness list.

Public Bank Bhd’s foreign shares topped the selling-on-strength list with RM3.51 million flowing out of the blue chip as it inched up five sen over the week to RM7.50. The recent sharp fall in the share prices of the banking groups, particularly Malayan Banking Bhd (Maybank), has made Public Bank’s valuation relatively more expensive, in terms of price-to-book value, and that prompted selling on the counter, dealers say.

Maybank was second on the list, indicating that selling pressure on the banking counter has not dried up. After tumbling to a low of RM3.98 on March 16, the stock gained 38 sen or 9.4% during the week to RM4.40. Nonetheless, the rise triggered a net outflow of RM3.44 million from the counter.

Maybank shares succumbed to heavy selling pressure in the earlier part of the month, following its proposed rights issue to raise RM6 billion, coupled with concerns over its ballooning impairment losses caused by the sharp fall on the value of its assets, namely, PT Bank Internasional Indonesia, which it had acquired earlier at hefty premium prices.

Over at casino operator Resorts World Bhd, investors unloaded RM2.57 million worth of shares during the week as its share price added seven sen or 3.65% to RM1.99.

Bumiputra-Commerce Holdings Bhd also saw RM1.86 million flowing out from the trading of its shares, as its share price regained its upward momentum, climbing 70 sen or 11.5% during the week to close at RM6.80 last Wednesday. The stock had rebounded from a recent low of RM6.05.

The substantial rise of 43 sen or 19.7% to RM2.61 in TM International Bhd’s share price between March 18 and 24, prompted investors to take profit, and resulted in an outflow of RM1.71 million from the trading of the counter. The selling reflected the jittery sentiments amid the uncertainties on the pricing of TMI’s rights issue. TMI announced on March 24, a five-for-four rights issue priced at RM1.12 per right, to raise RM5.25 billion.

Plantation stocks Kuala Lumpur Kepong Bhd (KLK) and PPB Group Bhd were both on the selling-on-strength list as their share prices climbed further. KLK saw a total of RM1.36 flowing out of its shares while PPB saw an outflow of RM1.35 million. Investors were locking in short-term profits on plantation counters due to the recent surge in crude palm oil prices.

On the buying-on-weakness list, KLCC Property Bhd topped the first with RM800,000 flowing into the counter between March 18 and 24, as its share price dropped three sen during the week to RM2.95. The counter appears attractive given its prime properties and land in the centre of KL.

PLB Engineering Bhd, a construction and property development outfit, saw RM610,000 flowing in during the week, as its share price lost one sen to RM1.03.

The share price weakness of Green Packet Bhd also attracted an inflow of RM550,000. The share price of the licensed Wimax service provider shed nine sen or 8.9% during the week to 92 sen.

Shipping conglomerate MISC Bhd’s foreign tranche share price dropped five sen during the week to RM8.30. The drop prompted a mild net inflow of RM480,000 into the counter.

This article appeared in The Edge Malaysia, Issue 748, March 30-April 5, 2009