Friday, January 03, 2014

2014: Weak Start For Malaysian Shares

PETALING JAYA: The local bourse kicked off the new year on a weaker note, dragged down by steep declines among blue-chip stocks with some investors booking quick profits following a sharp run-up towards the end of 2013.
Regional markets were mixed on the first trading day of the year. Thailand’s SET Index dived 5.2% yesterday to 1,230.77 points on domestic political worries, but stocks were higher by 1.2% in Indonesia and little changed in Hong Kong.
“Last month was a pretty good month for blue chips. Sentiment for blue chips such asTelekom Malaysia, Tenaga Nasional and Public Bank, among others, was pretty high, so investors could have taken the advantage to take some profit,” said Areca Capital Sdn Bhd chief executive officer Danny Wong.
Shares of Public Bank tumbled yesterday after the bank said it would merge its local and foreign tranches into a single counter. Shares in Kuala Lumpur Kepong Bhd led losing stocks, down 58 sen or 2.3% to RM24.32, followed by Petronas Dagangan Bhd down 46 sen, or 1.5%, to RM30.98 and Tenaga Nasional Bhd 20 sen lower, or 1.7%, to RM11.18.
The FTSE Bursa Malaysia KL Composite Index fell 14 points to 1,852.95 yesterday with 1.25 billion shares valued at RM1.35bil changing hands. There were 347 gainers against 406 losers while 302 counters were unchanged.
Pacific Mutual Bhd executive director and chief executive officer Gary Gan said market volatility could also bring about potential opportunities where the use of accumulative investment strategies to ride out violent market swings could ultimately position one’s portfolio for eventual optimum results.
“Looking at the local equity market, although we have seen the index hitting record levels recently, there are still sectors with attractive propositions that should continue to do well in the short to medium term,” he said in a statement.
“The oil and gas, plantations, utility, construction and consumer sectors, as bolstered by positive newsflows from the recently announced Budget 2014, will continue to be the key drivers for the coming quarters but stockpicking will be key.”
Market sentiment for the year is generally positive, analysts said.
Wong said the upcoming expected initial public offerings (IPOs) were a sign of liquidity in the market. However, he notes that investors should be selective in picking which IPOs to participate, based on industry and rationale for the listing.
“Relative to IPOs, it is not so broad-based that everything will go up,” he said.
StarBiz reported in November that at least nine major listings are in the works this year, estimated to raise more than RM18.4bil from the market. These includeIskandar Waterfront Holdings, Medini Iskandar MalaysiaMalakoff Corp Bhd and1Malaysia Development Bhd.
Meanwhile, Areca Capital’s strategy for the year is focused on small to mid-cap stocks that have strong fundamentals, riding on external factors. The US economy, which is recovering on a slow and gradual pace, bodes well for the economies of emerging markets.
Wong said oil and gas companies, export-oriented firms and businesses that benefited from the subsidy rationalisation programme would contribute to the overall positive outlook this year.
“Small to mid caps that were overlooked last year might have their day this year,” he said.

1 comment:

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