Bursa Malaysia 'To See Spring Rally'

WEALTH CREATION

COME 2010, all kinds of investors, including fund managers and barefoot investors, may start entering the Malaysian capital market in a big way.

"We expect Bursa Malaysia to extend upward its current bull run by around 15 per cent in the first half of 2010 and to outperform in the second half," said Malaysian Investors Association's president Datuk P.H.S. Lim.

"Most likely we may see a spring rally and after this, we may even have a chance to see a fatigued bull," he told Bernama.

According to Lim, the market may see a strong resistance at the level of around 1,458 points in terms of the composite index to challenge its all-time high of 1,525 points.

The market capitalisation is likely to exceed RM1 trillion from the current RM998.3 billion (as at Dec 30, 2009), he said, adding that the all-time record high of market capitalisation was RM1.100 trillion.

"The current bull run started in the first week of 2009 and we have so far not seen a meaningful correction. It needs a correction and a meaningful one could erase about 15 per cent," Lim said.

"In 2009, we saw strong rallies in the prices of some commodities, including copper (139 per cent), sugar (126 per cent), petroleum crude oil (110 per cent) and gold (60 per cent)," he said.

For 2010, Lim said there is a strong posibility of other soft commodities like corn, wheat, rice and vegetable oil moving up in price movements.

"Such a situation could be beneficial to our palm oil industry," he said.

The gross domestic product (GDP), currently at RM629 billion, may achieve a positive growth rate of around three per cent for 2009, depending on the global economic growth, Lim said.

"Once the major economies are stabilised, there is a possibility of interest rates starting to move up to combat inflationary pressure. Any increase in interest rates in 2010 is likely to be mild," he said.

Describing 2009 as a "golden year", Lim said as at Dec 30, the composite index stood at 1,271.12 points with a gain of 44.98 per cent compared with 2008 which saw a minus 39.33 per cent at 876.75 points.

According to him, the year has turned out to be one of the best for Bursa Malaysia.

"The worst time is the best time for financial investments in the Malaysian stock market," he said. - BERNAMA