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KUALA LUMPUR SHARES OUTLOOK – LOWER IN RANGEBOUND TRADE AFTER WEAK WALL ST
KUALA LUMPUR (XFN-ASIA) – Share prices are expected to open slightly
lower in rangebound trade following the 213-point decline on the Dow Jones
Industrial Average on Friday, dealers said.
They added trading volume is likely to ease as most investors square
their positions earlier than expected in view of the four-day break for
Chinese New Year next week.
On Friday, the Kuala Lumpur composite index closed up 2.71 points or 0.30
pct at 905.41.
The all-share Emas Index added 0.51 points to 206.09, while the second
board index edged up 0.40 to 83.90.
Losers outnumbered gainers 340 to 333, with 330 stocks unchanged and 320
untraded. Volume was 573.56 mln shares worth 743.73 mln rgt.
“The market will continue to trade within a narrow tange given the sharp
decline on Wall Street last Friday,” a local brokerage dealer said.
He sees the key index’s resistance at 910 points, with support at 895
points.
Mitrajaya Holdings may gain after its wholly owned subsidiary Pembinaan
Mitrajaya Sdn Bhd won a 66.65 mln rgt contract from Putrajaya Holdings Sdn
Bhd.
Nova MSC may also rise after its wholly-owned subsidiary novaCITYNETS Pte
Ltd won a 18 mln rgt land transport information systems contract.
(1 usd = 3.75 rgt)
Japan’s Nikkei Average, Topix Fall; Canon and Nissan Motor Drop
Japan’s Nikkei 225 Stock Average fell 205.13, or 1.3 percent, to 15,491.56 at 9:03 a.m. in Tokyo. The broader Topix index dropped 20.84, or 1.3 percent, to 1603.35. Canon Inc. and Nissan Motor Co. led the declines.
Growth Slows on Declining Auto Sales: U.S. Economy Preview
A slump in auto sales caused the U.S. economy to slow last quarter, a pause that may be temporary as consumer spending rebounds and business investment gathers momentum, economists said reports this week will show. Gross domestic product, the sum of all goods and services produced, probably rose at a 2.8 percent annual rate from October to December, snapping a string of 10 straight quarters exceeding 3 percent, according to the median estimate of economists in a Bloomberg News survey. The growth rate compares with 4.1 percent in the previous three months and an average quarterly gain of 3.1 percent during the past two decades. Auto sales in October dropped to a seven-year low when manufacturers withdrew employee-pricing discount plans. The slump at the start of the quarter proved too large to overcome, even as car sales rebounded in the last two months. With the job market improving, wages rising and business confidence on an upswing, the economy is likely to regain its footing this quarter. The Commerce Department is scheduled to issue the GDP report on Jan. 27. The report also is projected to show that consumer spending, which accounts for about 70 percent of the economy, grew at a 0.5 percent annual pace in the fourth quarter, the weakest since the last three months of 1991, after growing at a 4.1 percent pace the previous three months.
20/01/06 : Morning Call : CNY Rally?
This is an article courtesy of OSK Research Sdn. Bhd.
By : OSK Research Sdn. Bhd published in OSK188.com on – 20 Jan, 2006
CNY Rally? In line with a recovery across Asia, the KLCI bounced up in morning trade only to give up most of its gains in afternoon trading, closing only 1.38 pts higher. Volume weakened as compared to the past week. Counters that recovered after the recent sell down include Proton and Shell Refining that gained 25 sen each. Companies within the Lion group including Lion Industries and Lion Diversified also continued their rise and were up 5.08% and 5.43% respectively. For today, the market will be digesting the implications of the Avenue – ECM Libra merger in that it may indicate further mergers and acquisitions for the rest of the Malaysian corporate scene. The market will also be looking for any indication with regards to interest rate hikes coming out from the Bank Negara meeting today. Crude oil prices jumped more than a US$1 per barrel to break the US$67 per barrel mark on further threats from Osama bin Laden and France’s nuclear rhetoric that was a veiled warning towards Iran. Nonetheless, markets in the U.S. shrugged off the higher oil price due to estimate beating earnings announcements from Advanced Micro Devices, Merrill Lynch and Pfizer. With futures trading at an almost 7 pts premium, the possibility of a CNY rally remains. Barring any negative news, we expect that the market may test the 907 pts resistance level while the 900 pts level remains the crucial support.
19/01/06 : Technical View – Back To Square One
This is an article courtesy of OSK Research Sdn. Bhd.
By : OSK Research Sdn. Bhd published in OSK188.com on – 19 Jan, 2006
Overwhelmed by bad news, the bull just could not take it. Intel’s poor earnings, a 3.7% jump in crude oil price, the melt-down of Japan’s stock market and weak stock markets throughout the world, were the main distractions to the local bourse.
The KLCI gapped down by more than 5 pts on the opening bell which is not common. After gapping down, the key index did manage to stage a rebound to close the downside gap, but most of the gains evaporated towards the end of the session.
All of yesterday’s bad news had distorted the short-term uptrend and believe it or not, the key index is now back to the breakout level. It means that those who had bought shares at the breakout level are now back to square one.
We retain our bullish bias view towards the short-term market but with a sense of caution. The 900-902 pts area can be considered as the last line of defence for the bull and the market is now struggling to hold up the previous breakout level.
If not because of the few major negative news items, the market would have had a great chance to at least consolidate at above the 906 pts level following the formation of an “Inverted Hammer” candlestick pattern, which is normally viewed as a rather reliable bullish reversal pattern.
More observation is needed as yesterday’s volatile market action has complicated the immediate outlook. Traders who are holding KLCI-linked shares may stick to their positions until we see a decisive dip from the 900-902 pts area.
Meanwhile, look for an immediate upside resistance at the downside gap, ranging from 902 pts level to the 907 pts level, followed by the 910 pts level. To the downside, the next support after the 900-902 pts area is seen at the 890 pts level.
18/01/06 : Technical View – Holding Up Well
This is an article courtesy of OSK Research Sdn. Bhd.
By : OSK Research Sdn. Bhd published in OSK188.com on – 18 Jan, 2006
The market got the much needed bounce to correct Monday’s dangerous decline. The KLCI went up to a high of 911.03 pts level before giving up most of the intra-day gains. The resulting chart action left behind an “Inverted Hammer” candlestick pattern which gives us a hope that the critical immediate support of 906 pts level will not be taken out anytime soon.
The “Inverted Hammer” is a fairly reliable bullish reversal pattern. It is likely that the market may be able to trade sideways at above the 906 pts level or even extend the rally we saw a couple of weeks ago. Traders should be glad to see a rebound here as a break below the 906 pts level is bad for the short-term market. The bull would not want to see the market retracing back to the breakout level of 906 pts level.
For today’s session, continue to look for an immediate resistance at the 910 pts level, followed by the recent high of 917 pts level. The immediate support for the market is seen at the 906 pts level, followed by the 900-902 pts area.