FBM KLCI ends 0.4% down @ 1063.66

Sentiment for world stocks started the new week on a weak note on Monday, July 13. Selling pressure was registered almost across the board in key Asian markets. It appears likely that trading will remain on the back foot in the near term.

Last week’s performance for US stocks did little to bolster flagging investor confidence. The closely monitored Dow Jones Industrial Average and broader based Standard & Poor’s 500 index declined by about 1.6% and 1.9%, respectively. Investor expectations for an imminent recovery took another hit last Friday when a preliminary survey indicated a sharp drop in US consumer confidence in early July, to the weakest level since March 2009.The US consumer had been the biggest driver for the global economic growth in recent years. Aggressive government stimulus packages and inventory rebuilding will give the economy a boost in the near to medium term. But sustainable longer-term growth has to be supported by underlying real demand. At the moment, anecdotal evidence suggests that the recovery in consumption by the world’s richest nations will be slow.

MALAYSIA'S FTSE Bursa Malaysia KLCI Index dropped 4.1, or 0.4 per cent, to close at 1,063.66, the lowest level since June 24 and the first decline in three days. Almost all the bellwether indices in Asian markets closed lower on Monday.

Share prices on Bursa Malaysia remained in the doldrums as investors stayed on the sidelines on lack of catalysts for re-rating.

Thirteen stocks fell and seven rose on the 30-member measure. July index futures slid 0.3 per cent to 1,060.
Market volume fell to less than 551 million shares, which is the lowest level since early-April. With the near-term outlook for the global equity markets turning hazy, investors are returning to the sidelines. On the positive note, they are not dumping shares. That suggests that most are still upbeat on the market going forward.

World stocks will continue to take their cues from Wall Street. Aside from corporate earnings results for 2Q09, the market will also be eyeing data on US housing starts, retail sales and industrial production this week.

United Plantations Bhd slid 2.4 per cent to RM12, the lowest level since May 25.
Hap Seng Plantations Holdings Bhd fell 2.9 per cent to RM2.01, the lowest close since May 7. Kuala Lumpur Kepong Bhd, Malaysia’s third-biggest palm-oil producer, declined 0.8 per cent to RM11.80, the fourth decline in five days.

Palm oil, the world’s most traded vegetable oil, may fall below RM2,000 ringgit a metric ton as output climbs faster than demand, according to Maybank Investment Bank Bhd and OSK Research. Palm oil futures dropped as much as 2.3 per cent to RM1,964 ringgit.

KNM Group Bhd, Malaysia’s biggest listed oil and gas services provider, dropped 2.1 per cent to 71.5 sen, the lowest since May 7.
Scomi Group Bhd declined 4.1 per cent to 58 sen and Petra Perdana Bhd lost 1.2 per cent to RM2.56.

Crude oil fell for a second day as Asian stocks declined, raising speculation that the global recession will sap demand for fuel and increase stockpiles.

Supermax Corp, a rubber-glove maker, jumped 8.2 per cent to RM2.12, the highest level since January 21, 2008.
The company said second-quarter net income almost doubled to RM25.8 million from the same period a year earlier.
The spread of swine flu has boosted demand for its products and Supermax is “confident” of reporting earnings per share of at least 27 sen for 2009, it said in a statement.