Thursday, May 5, 2011

KLCI Outperformed Regional Bourses, 24 - 30 April 2011 Review

Equity
Despite the stronger US consumer confidence data and the US Federal Reserve in the Federal Open market Committee (FOMC) meeting signaling low interest rates would be maintained to sustain economic growth, the local stock market extended low-volume congestion mode amid lackluster trade for another week. Nonetheless, the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) increased 12.2 points, or 0.8% to settle at 1,534.95. For the week, the FBMKLCI was the star performer among the regional bourses. It outperformed regional bourses as the MSCI Asia Ex Japan registered - 0.51%. Average daily traded volume shrunk further to one billion shares valued at RM1.28 billion, compared with the RM1.48bn average the previous week.

Equity Market Outlook
We see the market to continue sideways between 1,525-1,545 as we think there is limited upside for the market in the short term. However, we remain bullish in the medium term as global/regional equity markets and commodities are expected to continue their respective rallies from the March lows. We continue to favour construction, banks and property. We prefer big blues rather than small-mid caps in anticipation of revival in foreign interest.

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



Source: ING Funds Berhad

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