KUALA LUMPUR: The surge in trading volume is expected to generate more interest in the market, with focus shifting to laggards and stocks which had been under the radar screen for months.Trading volume surged to 1.66 billion units, the highest since January last year while the KL Composite Index is at its highest since October last year. Analysts said the market is liquidity driven while the next target for the KLCI should be the 970 level. But some fund managers were concerned the run-up in stocks with no fundamental news could not be sustained. Stocks which had fresh corporate news include Cahya Mata Sarawak, which secured RM232 million in construction jobs from Sarawak Energy to develop and construct the latter’s headquarters in Kuching.Axiata Group’s entitlement to the rights shares Axiata-OR fell nine sen to 56 sen on its first trading day. However, there was some support for the stock at lower levels, which could provide arbitrage opportunity.Tenaga posted net profit of RM674.6 million for 2Q ended Feb 28, 2009, down 36.5% from RM1.06 billion a year ago, mainly due to foreign exchange translation loss. Operating profit was RM1.16 billion compared with RM1.14 billion.However, Tenaga’s board of directors had affirmed the view that the group’s performance for FY2009 will remain weak.While Maybank has risen sharply in recent days, but there has been some intermittent profit taking activities. Proton would continue to be on the trading screen after Prime Minister Datuk Seri Najib Razak launched the Exora, the first locaaly manufactured MPV. Najib spelt out clearly that failure was not an option and said Proton should seriously consider a strategic partnership.The seven-seater Exora will be priced from RM69,998 to RM75,998.AmResearch upgraded Proton to a “Buy” from “Hold” as it expects improved news flows and minimal downside risk from the current level. It revised up its fair value to RM3.20 per share from RM2.02 per share. Meanwhile, investors would be advised to lock in gains from some stocks which had surged recently, in the absence of fresh fundamental reasons or corporate news. However, plantations would continue to offer upside due to the firm crude palm oil prices.On the economic fundamentals of the country, Malaysian Institute of Economic Research expects the economy to shrink 2.2% this year, revising it from its earlier 1.3%.The private sector think-tank also said Bank Negara still has room to cut interest rates.
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