KLCI up on bargain hunting; AirAsia shares cut losses

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KUALA LUMPUR (June 17): The FBM KLCI rose as investors bargain hunted for beaten-down shares in an oversold Malaysian stock market.

At 5pm, the KLCI gained 4.62 points or 0.3% to close at 1,726.86, lifted by blue chips such as CIMB Group Holdings Bhd and SapuraKencana Petroleum Bhd.

Areca Capital Sdn Bhd chief executive officer Danny Wong told theedgemarkets.com "the market performed better today because of bargain hunting by investors after suffering from a heavy sell down for the past few days".

The KLCI had risen amid concerns on Greece's debt and timing of US interest rate hikes.

Reuters reported that investors in most asset classes traded cautiously on Wednesday as they waited for a signal from the US Federal Reserve on its first rate hike and whether the euro zone would pull another Greek rabbit out of its hat.

Markets are hoping that the Fed's statement due at 1800 GMT, followed half an hour later by Chair Janet Yellen's news conference, will cut the list of potential hike dates which currently stretches from September to late next year.

Across Asian share markets, Japan's Nikkei 225 fell 0.19% while Hong Kong's Hang Seng rose 0.7%. South Korea's Kospi increased 0.3%.

Bursa Malaysia saw 1.48 billion shares worth RM1.74 billion traded. There were 377 gainers and 382 decliners while 298 counters remained unchanged.

Top gainers included Allianz Malaysia Bhd and Elsoft Research Bhd while top decliners included Kuala Lumpur Kepong Bhd and Lafarge Malaysia Bhd.                                                      

The most actively-traded stock was AirAsia Bhd. AirAsia fell 11 sen or 7% to close at RM1.53 with some 170 million shares done.

The stock had earlier fallen to an intraday low of RM1.43. AirAsia shares cut losses after the company issued a detailed business update to assure investors of the budget airline's strong fundamentals and transparency.

The four-page business update filed with Bursa Malaysia today followed a recent report by Hong Kong-based GMT Research, which questioned AirAsia's accounting, profit generation, cash flow, leverage and group structure.