KL shares to re-test 1,300 points mark

WEALTH CREATION

Malaysian shares are likely to re-test the 1,300 points level next week but a stronger upside could be capped by negative external factors in the absence of fresh leads locally, said an analyst.

"A technical rebound is on the cards but it won't be strong as the local bourse has the tendency to drift with the already weak regional markets.

"Hence, it will try to sustain itself above the 1,300 level within a tight range of between 1,305 and 1,293 next week, the analyst from local stock broker said.

The Malaysian market is also expected to be subdued for the month of January with some excitement emerging a week before the Chinese New Year.

However, a dealer said a market correction and downside momentum was a good opportunity for investors to buy defensive stocks at better values.

TA Securities, in its research note on Friday, said the immediate downside cushion for the index was at the 1,300 points level but better retracement support could be seen at the 1,289 and 1,281 points level on regional weakness.

For the just-ended week, the market rose beyond 1,300 points but struggled to sustain at that level as weaker external factors dampened sentiment.

Trading was confined within a tight range on Thursday due to looming concern over monetary tightening in China amid its 10.7 per cent Gross Domestic Product growth for the fourth-quarter of 2009 and 8.7 per cent for the full year.

Thursday's performance on Wall Street was the worst in the last three months and impacted not only the local bourse but also regional markets the following day.

However, late selective buying on Friday managed to push the FBM KLCI to end the week at 1,300.45, up 1.87 points from 1,298.58 previously.

The Finance Index surged 85.44 to 11,415.49, the Plantation Index fell 75.32 points to 6,439.72 and the Industrial Index was 15.83 points lower at 2,700.9.

The FBM Emas Index fell 21.56 points to 8,750.0, the FBM Top 100 Index declined 1.9 points to 8,510.86 and FBM ACE Index plumetted 93.73 points to 4,495.21.

Total turnover declined to 5.927 billion shares, worth RM7.437 billion, from 8.014 billion shares valued at RM9.018 billion, previously.

Volume on the main market shed to 4.838 billion units, valued at RM7.188 billion, from last week''s 6.964 billion units worth RM8.733 billion.

Turnover for call warrants declined to 284.809 million units, worth RM55.089 million, from 151.238 million units valued at RM27.737 million previously.

The ACE Market volume slipped to 748.839 million units, valued at RM165.66 million, from last week''s 781.886 million units worth RM213.769 million. -- Bernama