Wednesday, May 20, 2009

Market To Remain Active

Market to remain active on pump-priming moves

Kenanga's head of research says he is maintaining his year-end target for the Kuala Lumpur Composite Index at 1128.

THE local market is expected to remain active, in terms of trading volume and value, due to the government's pump-priming initiatives, says Yeonzon Yeow, head of research at Kenanga Investment Bank.

"At this point, the market volume and value traded seems to be healthy, drawing back both local institutions and, to a certain extent, foreign institutions," Yeow told reporters after K&N Kenanga Holdings Bhd's shareholders meeting yesterday in Kuala Lumpur.Speedy implementation of the initiatives under Budget 2009 and stimulus packages will help compensate for the sharp fall in Malaysia's exports.

Exports fell for a sixth straight month in March as overseas shipments dropped 15.6 per cent from a year earlier.

Yeow said he was maintaining his year-end target for the Kuala Lumpur Composite Index (KLCI) at 1128.

The KLCI ended 11.48 points higher at 1023.49 yesterday, driven by overnight gains on Wall Street. Gainers outnumbered losers 544 to 158 and turnover was 1.754 billion shares valued at RM1.599 billion.

Yeow is optimistic about the local market, saying that it is a matter of time before signs of an economic recovery were in sight.

He said the banking sector is doing better as seen in the rising of non-interest income and loan growth experienced in the first quarter of 2009.

"Sentiments have turned very positive as seen three weeks ago when I was visiting manufacturers in Penang. Many said they are having better visibility of up to three months as opposed to a visibility of one week experienced last December," he added.

He also said that influenza A (H1N1) would not have a significant impact economically on retail sales and cross-country businesses in Asia.Meanwhile, Kenanga group director Tengku Zafrul Aziz said the group has implemented key performance indicators to track individual deliverables under Kenanga's transformation plan.

The transformation plan is aimed at growing the group's financial services, becoming cost-efficient and enhancing profitability within a year.

Kenanga's latest initiative will also see the group strengthening its investment banking unit, which has secured some RM1 billion worth of mandates under its private debt securities services.

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