KLCI Drifts Sideways >>> Profit Taking Emerges 13 May 2009

Shares on key Asian markets traded mostly sideways on May 13. Stock markets have racked up significant gains since early-March 2009 and investors are now reassessing the risks and returns in chasing prices higher. On the overall though, sentiment remained on a firm footing.

Given the big gains over such a short period of time, it is not a bad sign for markets to consolidate for a while and gather strength for the next upward move. It is generally believed that the swiftness of the recent rally has left many investors out of play.

As such, there could still be substantial money on the sidelines just waiting for the next pullback. If so, markets may well stay resilient and continue to move higherOf course, much will depend on the health of upcoming economic data. So far, the numbers suggest that the recession is abating. But conditions on the ground are still fairly grim.

In other developments, crude oil futures traded close to the US$60 per barrel mark after an unexpected drop in US inventories. Oil prices have come well off its lows, again, on expectations of a global economic recovery. The weaker US dollar is also helping boost commodity prices.

Shares on the Bursa Malaysia too traded on a mixed note. The KL Composite Index fluctuated between positive and negative territories as investors looked for fresh leads. The benchmark index ended the day marginally lower at 1,022.8.Market breadth fared better, staying in the black throughout the day. At the close, there were roughly two gaining stocks for every losing one. PPB and Tanjong plc were among the top gainers for the day while MISC-F and Maybank were among the big losers.

Trading volume improved from the previous day to 3.17 billion shares. Compugates Holdings was the day’s most heavily traded counter, by far. Other actives include KNM, SAAG, Scomi and Talam.

HAPPY TRADING !!!