KLCI erases losses on foreign buying

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KUALA LUMPUR (Oct 13): The FBM KLCI rose 1.28 points or 0.1%, supported by foreign fund interest in Malaysian blue-chip stocks. Foreign fund support here came amid Asian share losses on China's weaker external trade data and overnight crude oil losses.

Malaysia's KLCI closed at 1,711.14 at 5pm on gains in stocks like Malayan Banking Bhd and CIMB Group Holdings Bhd. The KLCI erased losses after falling to an intraday low of 1,705.30.

The KLCI spot market close compares with KLCI futures for December 2015, which traded below the 1,700 level today.

Inter-Pacific Securities Sdn Bhd research head Pong Teng Siew told theedgemarkets.com some foreign funds were slowly entering the market after the recent selldown.

Pong said these foreign institutional investors were focusing mainly on blue chip stocks.

"These foreign funds are slowly buying into the blue chips, supporting the modest gains in the KLCI. However, these funds are still adopting a wait-and-see approach, to see if the market's gains are sustained.

"Foreign funds are also keeping an eye on the upcoming entry of ValueCap Sdn Bhd into the local market, to see if the injection will be enough to stimulate the stock market, he said.

The government earmarked RM20 billion for state-owned fund manager ValueCap to invest in the local share market. ValueCap is equally-owned by Khazanah Nasional Bhd, Kumpulan Wang Persaraan (Diperbadankan) and Permodalan Nasional Bhd.

China economic data and crude oil prices were closely watched. Reuters reported that world share prices fell on Tuesday, snapping their longest winning streak since February after Chinese trade data gave a further sign the world's economic growth engine is sputtering, and a big fall in oil prices triggered profit taking.

Chinese imports plunged 20% in September, casting doubt on the strength of domestic demand in the economy, while oil fell more than 5% overnight after a report that OPEC continued to boost production.

Asian shares stepped back from two-month highs on Tuesday and commodity currencies retreated as a big fall in oil prices triggered profit taking after a strong rally, though fading expectations of an imminent US rate hike lent some support.

In Malaysia, Bursa Malaysia saw 2.47 billion shares worth RM2.46 billion exchanged. Gainers beat decliners at 433 against 414.

Top gainers included British American Tobacco (M) Bhd, Nestle (M) Bhd and Success Transformer Corp Bhd. The top decliner was UEM Edgenta Bhd.

The most-active counter was Frontken Corp Bhd.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)