KLCI to stay under pressure as HSR and MRT3 jobs get nixed

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KUALA LUMPUR (May 31): The FBM KLCI may continue to remain under pressure today despite the overnight rebound at Wall Street and European markets after Putrajaya derailed yet another mega project — the third mass rapid transit (MRT 3) line.

The local bourse was in a tailspin yesterday and fell sharply as investors started a frenzied seling spree, exarcebated by the announcement by Prime Minister Tun Dr Mahathir that the MRT3 project was being shelved.

With the earlier announcement of the High Speed Rail (HSR) link project being nixed, several major construction players tipped to be involved in the job took a hit at Bursa Malaysia.

The trend could spill over to today after the scrapping of the MRT3 job, with consruction-, property- and building materials-linked stocks coming under stress again.

Meanwhile, hopes that Italy might avoid a potentially damaging general election lifted European markets on Wednesday, bringing Italian bond yields off multi-year highs and dampening some of the recent buying interest for German and U.S. government bonds, according to Reuters.

World stocks gained 0.38 percent, and European shares made tentative gains after falling almost 4 percent in the past five days. Wall Street opened higher, it said.

The Dow Jones Industrial Average rose 199.21 points, or 0.82 percent, to 24,560.66, the S&P 500 gained 25.37 points, or 0.94 percent, to 2,715.23 and the Nasdaq Composite added 60.50 points, or 0.82 percent, to 7,457.09, said Reuters.

Based on corporate announcements and news flow yesterday, stocks in focus today may include LBS Bina Group Bhd, NWP Holdings Bhd, Brahim's Holdings Bhd, CIMB Group Holdings Bhd, Hong Leong Bank Bhd, Hong Leong Financial Group Bhd, BIMB Holdings Bhd, Malaysian Resources Corp Bhd, Lingkaran Trans Kota Holdings Bhd, My E.G. Services Bhd, KPJ Healthcare Bhd, Malayan Flour Mills Bhd and MNRB Holdings Bhd.