Friday 29 Mar 2024
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KUALA LUMPUR (July 25): The FBM KLCI closed up 4.17 points or 0.25% today at its intraday high after a spike in the final trading minutes following a sharp rise in the share prices of components Press Metal Aluminium Holdings Bhd and Kuala Lumpur Kepong Bhd (KLK). Telekom Malaysia Bhd (TM) shares fell.

At 5pm, the KLCI closed at 1,656.58. Press Metal ended up 20 sen or 4.49% at RM4.65 while KLK rose 18 sen or 0.76% to RM23.82.

From a global viewpoint, the KLCI closed up after volatile trade as anticipation of the US and European Central Bank interest rate cut besides the corporate financial reporting season for the April-to-June quarter moved to the forefront of investor’s minds.

Reuters reported that Asian shares rose after a cautious start, while the euro hovered near two-month lows as soft economic data fuelled hopes the European Central Bank could cut rates at its meeting on Thursday.

In Malaysia, Areca Capital Sdn Bhd chief executive officer Danny Wong told theedgemarkets.com that investors are waiting for news on the US' interest rate decision and at the same time eyeing quarterly corporate earnings announcements before making any big investment decisions.

The US-China trade war also continues to be a key concern, Wong said.

“The US-China trade war is present, and there is newsflow on it every day, but there is no clear direction [in terms of how the trade conflict will continue to develop]” said Wong.

Across Bursa Malaysia today, 2.76 billion shares worth RM2.01 billion were traded. Top gainers included Press Metal and KLK.

TM closed down 35 sen or 7.87% at RM4.10 with some 38 million shares traded.

Shares of TM ended among top decliners and most-active counters after Goldman Sachs downgraded the recommendation on TM to sell from neutral.  

Bloomberg reported that Goldman Sachs, however, raised its TM target price to RM3.65 from RM2.85.

TM's share price could have also taken cue from a CIMB Research report today.

CIMB analyst Nick Foo said traders may want to sell TM shares now because CIMB thinks the recent spike in TM's share price had fully reacted to the group's latest quarterly financial results, which showed better-than-expected earnings.

"Share prices surged more than 70% since the stock’s latest quarterly financial results showed better-than-expected earnings. We think that the recent spike in share prices has fully reacted to the said unexpected performance given the negative divergence formation on the indicators.

"Both moving average convergence divergence (MACD) and relative strength index (RSI) are starting to decline, which is in line with the price movements.

Traders may want to sell the stock now, with a stop placed at RM4.70. A break below RM3.91 would send prices down towards RM3.47 next," Foo said.

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