Thursday, May 12, 2011

FBM KLCI Down 1.27% But Fared Better Vs Region, 1 - 7 May 2011 Review

Equity
Asian stocks traded lower in the week, weighed down by weak performance on Wall Street and commodity-related shares which were battered by falling crude-oil and metals prices. The local market was not spared. Driven by a collapse in commodity
prices coupled with concerns of more rate hikes in emerging markets to curb spiraling inflation as well as BNM’s monetary normalization, FBM KLCI lost 5.7 points to end at 1515.5 points. However, Malaysia did better than the rest of the region as the FBM KLCI was down 1.27% against the steeper 2.58% decline in the MSCI ex-Japan. Average daily trading value rose 5% to RM1.39 billion (RM1.32 billion previously) but was still 26% below the three-month average of RM1.87 billion.

Equity Market Outlook
We see the market slight upward bias following a steady base building over the last two weeks. We were positively surprised with the response from the Malaysia Corporate Day in London as well as Dato’ Sri Idris Jala’s optimism that the Economic Transformation Programme (ETP) could be more successful than the Government Transformation Programme (GTP) as the private sector has been very enthusiastic about it.. We think the news flow on Entry Point Project will continue be the major
catalyst for construction and property sectors.

Equity Market Strategy
Stock picking is still our strategy with preference for liquid fundamental stocks on weakness.


Source: ING Funds Berhad

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