Thursday 28 Mar 2024
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KUALA LUMPUR: Blue chips including Genting Bhd rebounded yesterday, lifting the FBM KLCI back above the 1,200-level, after Wall Street chalked up gains overnight for the fourth consecutive trading day.

The momentum at the regional markets, some positive news on fundamentals as well as the recovery of key blue chip Genting Bhd went towards helping lift the 30-stock index, said an analyst.

MIDF Research head Zulkifli Hamzah said data released by the Statistics Department on the industrial production index (IPI) was likely taken as an indication of still strong fundamentals.

The IPI in July fell 8.4% from a year earlier but this was better than economists’ estimate of a 10.5% contraction. When compared with June, the IPI for July showed an increase of 7.1%.

Zulkifli said the market appeared to respond well to positive news on fundamentals, including the IPI figures.

“Even at MIDF Research we had expected about a 9% drop in the IPI. Therefore an 8.4% decline is better than consensus estimate and people will react positively to it,” he said.

However, he said it was harder to gauge the extent of foreign fund inflow into the market, given foreign fund managers still viewed Malaysia with some scepticism.

“I think the positive sentiment at the local market is a follow-through from the corporate earnings season, especially on blue chips and the banking sector that reported good sets of results. “If we look at the buying pattern, it is quite broad-based with both institutional and retail stocks being taken up,” he said.

Zulkifli also said the current market direction was not what most analysts and dealers had expected, as there would almost always be a lull due to investors clearing positions before a long holiday, like the upcoming Hari Raya period.

The FBM KLCI opened firmer yesterday and rose as much as 13.65 points to an intra-day high of 1,210.11. The benchmark index closed 0.4% or 4.82 points higher at 1,201.28. Trading volume was 649.38 million shares valued at RM1.25 billion.

Crude palm oil for the third month delivery rose RM5 per tonne to RM2,171 and crude oil gained 38 cents per barrel to US$71.69 (RM250.92) as at 6.50pm yesterday.

At the regional markets, South Korea’s Kospi jumped 2.3% to 1,644.68; Japan’s Nikkei 225 rose 1.95% to 10,513.67, Singapore’s Straits Times Index added 1.19% to 2,682.02, Taiwan’s Taiex Index gained 1.12% to 7,332.08, and Hong Kong’s Hang Seng Index was up 1.05% to 21,069.56. The Shanghai Composite Index, however, slipped 0.73% to 2,924.88.

IJM Corporation Bhd led gainers on Bursa Malaysia, adding 27 sen to RM6.23. LPI Capital Bhd rose 26 sen to RM12, Boustead Heavy Industries Corporation Bhd was up 16 sen to RM5.35 while Guinness Anchor Bhd and Astro All Asia Networks Plc each gained 15 sen to RM6.90 and RM3.65.

Genting, which took a beating on Wednesday and fell 4.2% or 30 sen to RM6.87 following the announcement that its 54.4% subsidiary Genting Singapore plc was planning a S$1.63 billion (RM4 billion) rights issue, rebounded and closed 10 sen higher at RM6.97.

RHB Research Institute Sdn Bhd said yesterday the rights issue plan would have minimal impact on Genting. It rated the stock outperform with a target price of RM9.15.

Genting Malaysia Bhd gained 1.04% or three sen to RM2.91 and appeared not to have been affected by the plan.

A Bloomberg poll of analysts on Genting yielded 18 buy calls, three holds and three sells. Meanwhile, Genting Singapore fell five cents to S$1.14 yesterday. There are six buy calls, three holds and two sells on the stock.

Genting Singapore is undertaking a renounceable rights issue of up to 2.04 billion ordinary shares at an issue price of 80 cents. This represented a 32.8% discount to its last traded price of S$1.19.

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