Profit Taking Keeps KLCI In Check 22 April 2009

Market consolidates recent gains
Shares on the Bursa Malaysia opened trading Wednesday on a firmer footing. The KL Composite Index surged sharply higher in the early hours of trade, hitting an intra-day high of 976.3 points.

The rally lost some steam as the day progressed with regional sentiment turning jittery. Still, the benchmark index managed to hold on to a two-point gain to close at 968.6 points.

Leading the gainers was British American Tobacco (BAT), ahead of the company's earnings results for 1Q09. Other notable gainers include YTL e-solutions, Parkson, Bumiputra Commerce and Astro.

YTL e-solutions added 13.5 sen to 51.5 sen. The company is to sign a tie-up with Samsung as part of its proposed RM2.5 billion investment to build a WiMAX-based platform. It intends to offer voice, broadband Internet and multimedia services nationwide within 14 months. YTL e-solutions is one of three companies licensed to operate a WiMAX network in Peninsular Malaysia. To date, only Green Packet has commercially launched WiMAX broadband services in the country.

Despite some profit taking in the later part of the day, sentiment stayed relatively firm. Market breadth was in positive territory throughout the day. At the close, there were roughly seven gaining stocks for every five losing ones.

Shares for Proton closed 12 sen lower at RM3. This was likely due to profit taking after its recent surge. Latest March data showed total industry vehicle sales falling about 5% year-on-year (y-o-y) to 44,205 units – but sales were 21% higher from the previous month. For the first three months of the year, total vehicle sales were down 9% y-o-y. This compares well to significantly steeper drops in other countries but could deteriorate in the coming months as the recession takes hold.

Recent suggestions of higher hire purchase rates may further dampen demand.Market volume improved slightly from the previous trading day with some 1.11 billion shares changing hands. Among the most actively traded counters were KNM, Time dotCom, Lion Diversified, Axiata, Lion Industries and Iris Corp.