KLCI extends winning streak; ringgit strengthens

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KUALA LUMPUR (Nov 24): The FBM KLCI ended 6.13 points or 0.4% higher on Tenaga Nasional shares and crude oil price gains.

Tenaga shares rose on news 1Malaysia Development Bhd (1MDB) was selling its power assets to China General Nuclear Power Corp. Investors could have perceived such updates as good news for Tenaga, amid concerns that Tenaga might overpay for state-owned 1MDB's power assets to bailout the company.

At 5pm, the KLCI closed at 1,677.03 points. State-controlled utility Tenaga added 16 sen or 1.2% to RM13.58, to become the ninth-largest gainer across Bursa Malaysia.

Yesterday, the KLCI rose 9.01 points or 0.54% to 1,670.9 points.

Today, fund managers said investors’ sentiment towards Malaysia had improved, as the country’s image seemed to be on a better footing with US and China, two of the world’s major economies, extending their hands to Malaysia recently.

“With (US President Barack) Obama coming to Malaysia last weekend, it improved Malaysia’s image. And then, China is looking to buy more Malaysian government securities, which showed that China is trying to stabilise the region’s financial markets,” Areca Capital Sdn Bhd chief executive officer Danny Wong Teck Meng told theedgemarkets.com.

Wong also said higher crude oil prices helped the ringgit to strengthen. At 5pm, the ringgit strengthened 1.39% to RM4.2425 against the US dollar.

“At this level, the ringgit is undervalued,” he said. Reuters reported crude oil futures rose more than 1% on Tuesday, after Saudi Arabia pledged to work towards oil price stability; while a strong U.S. dollar and an expected rise in U.S. crude stocks helped to keep the gains in check.

Brent futures for January climbed 51 cents to US$45.34 a barrel as of 0745 GMT, while U.S. West Texas Intermediate (WTI) crude was up 52 cents to the session's high of US$42.27 a barrel.

Bloomberg reported that Malaysia’s ringgit rose the most among emerging-market currencies; while stocks and bonds gained, after 1MDB strucked the deal with China General Nuclear.

Across Bursa Malaysia, there were 2.67 billion shares, worth RM2.39 billion, exchanging hands. A total of 573 stocks declined against 373 gainers.

Instacom Group Bhd was the most actively-traded counter. The biggest decliners included Nestle (M) Bhd and KESM Industries Bhd.

Across Asia, Japan’s Nikkei 225 gained 0.23%, while South Korea’s Kospi rose 0.63%. Hong Kong’s Hang Seng fell 0.35%.

Reuters said Asian shares struggled on Tuesday, after a healthcare mega-merger failed to impress Wall Street; while the dollar took a breather from its run to eight-month highs, on rising conviction the Federal Reserve will raise interest rates next month.

(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.)