ZLBT Morning Views >>> Tight Range Tipped For Malaysia Stocks

Tight Range Tipped For Malaysia Stocks
The Malaysian stock market on Tuesday wrote a finish to the five-day winning streak in which it had risen more than 40 points or 2.6 percent. The Kuala Lumpur Composite Index fell just below the 1,555-point plateau, and now investors are expecting to see limited movement when the market opens on Wednesday.

The global forecast for the Asian markets is flat with a downside bias, particularly with many of the regional bourses remaining seriously overbought. Gold stocks are expected to provide support, along with technology and retail shares - while airlines are likely to fall under pressure. The European and U.S. markets finished mixed but little changed, and the Asian markets are tipped to follow that lead.

The KLCI finished slightly lower on Tuesday as profit taking from the financials and plantation stocks was mitigated by gains from the industrial sectors.
For the day, the index eased 2.41 points or 0.15 percent to finish at 1,553.07 after trading between 1,552.27 and 1,557.43. Volume was 1.600 billion shares worth 1.970 billion ringgit. There were 493 decliners and 347 gainers, with 274 stocks finishing unchanged.
Among the actives, Seal Incorporated, Leweko Resources, Maybank and Petronas Chemicals all finished higher, while CIMB Holdings fell under pressure.

Malaysian Economy Updates
In economic news, Malaysian exports increased 10.7 percent year-on-year in February to MYR 51.85 billion, the department of statistics said Tuesday. Economists had forecast exports to increase at a pace of 5 percent. Imports grew 11.5 percent annually to MYR 39.21 billion, while the expected growth rate was 14.4 percent.

The trade balance showed a surplus of MYR 12.64 billion, making it the 160th consecutive month of trade surplus since November 1997. On a monthly basis, exports decreased 5.5 percent in February, while imports contracted 12.6 percent. Total trade increased 11 percent from a year earlier, but fell 8.7 percent month-on-month.

Wall Street offers little guidance as stocks moved back to the downside in the afternoon on Tuesday after rising over the course of morning trading. The pullback was partly due to uncertainty about the outlook for monetary policy following the release of the minutes of the latest Federal Reserve meeting.
Stocks came under pressure in the afternoon, as the minutes of the March meeting of the Federal Reserve showed that the members of the bank's Federal Open Market Committee have some differences of opinion regarding the outlook for monetary policy.

"A few participants indicated that economic conditions might warrant a move toward less-accommodative monetary policy this year; a few others noted that exceptional policy accommodation could be appropriate beyond 2011," the minutes revealed.

Traders are likely to keep a close eye on any further comments from Fed officials regarding the central bank's plan to purchase $600 billion worth of long-term securities by the end of June.
The upward move seen earlier in the day came as traders reacted positively to further news of the merger-and-acquisition from, including news that National Semiconductor (NSM) agreed to be acquired by Texas Instruments (TXN) for $25 per share in an all-cash transaction of about $6.5 billion. Shares of National Semiconductor surged up by 71 percent on the news, as the offer price represents a 78 percent premium to National Semi's closing price on Monday.

The major averages pulled back well off their best levels of the day, closing nearly flat for the session. While the NASDAQ edged up 2.00 points or 0.1 percent to 2,791.19, the Dow slipped 6.13 points or 0.1 percent to 12,393.90 and the S&P 500 inched down by 0.24 points or less than 0.1 percent to 1,332.63.

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