KLCI drifting >>> BCHB up Maybank down 02 Jul 09

Sentiment for equities saw little change on Thursday, July 2 from what has been the case for the past few weeks. Investor confidence in a global economic recovery remains mostly intact but there are concerns over its timeframe. There have been little leads from Wall Street of late. Last night was no different. The closely monitored Dow Jones Industrial Average and broader-based Standard & Poor’s finished higher but buying was tempered with caution. Investors are waiting for the latest reading on the US job market. The market expects the number of job losses in June to be slightly higher than that in May, exacerbated by plant shut downs at General Motors, which has filed for bankruptcy in attempts to restructure itself. Unemployment rate is estimated to rise further to 9.6% from 9.4% in May.

In fact, most analysts expect unemployment to keep rising well into 2010 when it could top 10-11%. The weak labour market is one of the primary reasons behind growing concerns that the global economic recovery may be slow.

In other developments, crude oil futures traded on the New York Mercantile Exchange hovered just below US$70 per barrel. Oil came under some selling pressure after a larger than expected increase in US stocks and recovery concerns.

The KL Composite Index moved in and out of positive territory in somewhat directionless trading Thursday. Share price movements were, by and large, capped in the absence of fresh leads. At the close, the KL Composite Index declined 0.69 points to 1,078.71 points. Declining shares outnumbered risers 405 to 204, while 222 counters were unchanged. Market volume totaled less than 907 million shares.

Some of the bigger losers for the day were BAT, Tanjong, Maybank and DiGi. Maybank and BCHB saw brisk trading, with 18.1 million shares in Maybank changing hands, while volume on Bumiputra-Commerce was 10.87 million shares.

At the gainers end, Bumiputra Commerce, Sime Darby and Public Bank were some of the bigger gainers. The three stocks will be among the four biggest constituents in the enhanced FBM KLCI, which will be introduced next Monday.

Citigroup said in a report today that Malaysian bank’s asset quality held up well, and non-perfroming loans situation remained manageable despite 6.2% on-year contraction in real gross domestic product.

AMMB is Citigroup’s top pick for the industry. AMMB was up 6 sen to RM3.46

As at 4.55pm, CPO most active futures contract on Bursa Derivatives fell RM80 to RM2,179 per tonne. CPO prices had fallen 21% from recent peak of RM2,789 on May 13, largely on concerns over rising palm oil stockpile and slowing export demand. Despite the decline, CPO is still up 25% higher year-to-date.