ZLBT Chats

Friday, April 3, 2009

KLSE @5.00pm 03 April 2009 >>> Flat trading after recent strong gains

More overnight gains on Wall Street sent Asian bourses higher at the open on April 3. However, most regional indices pared their early gains and closed relatively flat as profit-taking activities set in after the previous day’s spectacular rally.
Investors were also locking in some gains ahead of the all-important US employment report for March due later on April 3.
A negative jobs report could well dampen investor sentiment. The sustainability of recent gains – and scope for more – will certainly depend on upcoming US economic data.
They will either help confirm or dispel investors’ recent optimism about the economy – noting that Wall Street has recently built in very strong expectations of a recovery later this year. On April 2, the Dow Jones Industrials average rose 216 points, and briefly broke through 8,000-mark for the first time since early February this year.
Wall Street has been enjoying a strong rally since March, driven by better than expected economic news in recent weeks, notably in the housing and manufacturing sectors.
Investors also welcomed the US Financial Accounting Standards Board’s decision to give auditors more flexibility in valuing illiquid mortgage assets.

The relaxation of the “mark-to-market” accounting rules will help reduce the stress on banks and companies saddled with illiquid assets that are difficult to value in the current environment.
On the local front, Malaysia’s exports in February 2009 fell much less than expected. February exports rose 3.4% month-on-month to RM39.59 billion, compared with January, due to higher exports of electrical and electronic products, although it still declined 15.9% year-on-year. The decline was much less than expectations of over 20%, as exports had slumped steep 27.8% year-on-year in January.
The KLCI started the day five points higher, but fell into negative territory by the mid-morning session before ending the day up 1.9 points at 907.
Advancing stocks edged out declining ones by a 6-to-5 ratio at the close. Positively, trading volume was very high at 938 million shares – the highest so far this year.

Actively traded stocks include KNM, MRCB, Mulpha, Zelan, Gamuda and UEM Land. Major gainers include Tanjong plc, Bumiputra-Commerce, Proton and YTL Corp. Losers include BAT, Tasek, Batu Kawan and Public Bank.

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