Bursar-Expect Some Sunshine This Year

Investment Banks are back on number crunching and scenario building. They expect a better year for stocks.

I am posting this news article as a benchmark to view the actual performance of the Bursar until the last trading day of the last week of 2010.

Let us read what they have to say.

"Share prices on Bursa Malaysia are likely to start the new year on a positive tone next week as investors return to swarm the market amid improving signs of economic recovery globally, dealers said.

The market, which closed for three consecutive Fridays starting Dec 17 last year for public holidays, had restrained some of these investors from taking heavy positions over long weekends. The local bourse was also closed for the New Year celebration yesterday.

This week, the local stock market is expected to be buoyant again with prospects for the new year remaining positive should the pace of economic recovery is maintained, said a dealer.

According to MIDF Amanah Investment Bank Bhd, strong earnings growth with more than 20 per cent is expected to be registered in the media, construction, utilities and shipping companies.

However, the strong earnings growth may not necessarily translate into positive investment recommendation as the latter is a matter of valuation, it said.

The main downside risk for earnings would be the rollback of public sector support where a smaller public spending especially on infrastructure projects would undermine earnings of companies drawing on government-related projects.

“More importantly, corporate Malaysia has to be wary about the pullback of monetary stimulus, as we expect an end to the easy money policy this year. Interest rates will start climbing again and that means a different kind of monetary dynamics that companies will have to handle,” the investment bank said in its research note.

MIDF is projecting the FTSE Bursa Malaysia Kuala Lumpur Composite Index to move to the 1,450 level this year.

Throughout the week just ended, trading was moderate with the FBM KLCI moving within 1,264.83 and 1,275.22 points.

On a Thursday-to-Thursday basis, the FBM KLCI rose 12.25 points to 1,272.78 from 1,260.53 the previous week.

The Finance Index jumped 172.90 points to 11,053.40, the Plantation Index increased 82.82 points to 6,362.91 while the Industrial Index eased 2.26 points to 2,654.51.

The FBM Emas Index surged 114.13 points to 8,507.61, the FBM Top 100 Index increased 95.34 points to 8,308.89, the FBM70 Index rose 155.84 points to 8,269.22 and the FBM Ace Index was 81.06 points higher at 4,299.58.

A total of 2.223 billion shares worth RM2.978 billion changed hands during the week compared with 1.714 billion shares worth RM2.713 billion traded previously.

Volume on the main market rose to 1.905 billion units valued at RM2.899 billion from last Thursday’s closing of 1.471 billion shares valued at RM2.656 billion.

Turnover for call warrants surged to 104.154 million units worth RM18.766 million from 46.024 million units worth RM6.693 million previously.

The ACE Market volume improved to 146.994 million shares valued at RM39.569 million from last Thursday’s 140.415 million shares valued at RM35.003 million. — Bernama"