Tuesday, April 17, 2007

Market Update

Malaysian shares ended up 0.6% at a record high closing level Tuesday, recovering from an intraday low as late fund buying overcame some profit taking activity, but off a record intraday high of 1334.44.

Gains on Wall Street overnight, the ringgit's continued strength against the US dollar and a healthy set of quarterly results from state-owned power producer Tenaga Nasional and banking group Public Bank set a positive tone in early trade.

The ringgit was up against the U.S. dollar late Tuesday, trading between MYR3.4340 - its strongest level since MYR3.35 in February 1998 - and MYR3.4390, on continued speculation that the Malaysian unit will soon be tradable offshore.

There was fairly strong buying momentum in early trade, but investors turned slightly cautious following losses on some Asian markets, while technical indicators suggest the market is overbought.

KLCI expected to trade between 1320 and 1340 points Wednesday with a downside bias as investors are expected to turn cautious ahead of the release of March inflation data. A recent government move to raise the ceiling price on steel billets and bars by 20% to ease domestic supply shortages and a growing black market is also expected to weigh.

However, companies in the steel sector were hurt despite the government allowing a 20% hike in the ceiling prices for steel bars and billets to MYR1,884 a metric ton and MYR1,553/ton respectively, against industry requests for an approximate 38% increase of MYR600/ton. Global steel prices are now around MYR2,200/ton.

This move will help earnings improve, but it will not be proportional to the rise in ceiling prices, steel makers will still have to absorb a loss, albeit a smaller one.

(Click to enlarge)

  • GM Still Interested In Tie-Up With Malaysia's Proton-Exec
  • Malaysia Ups Steel Ceiling Prices On Shortage Concern-Bernama
  • S&P Cuts Sdred To Buy From Strong Buy
  • Steel Stks Fall Despite Ceiling Price Hike
  • Crescendo A Strong Buy Based On Charts-MIMB
  • S&P Ups Priceworth To Buy; Target To MYR1.12
  • CPO Futures Down Slightly On Profit-Taking
  • Time Eng Uptrend Targets 95 Sen - Chart OSK
  • MS Stays Overweight On Tenaga, Tgt MYR14
  • MS Ups AirAsia Tgt To MYR1.80;Keeps On Equal Weight
  • CS Ups Evergreen Fibre Target To MYR2.3,Outperform
  • Faber +10.7% On OSK's M&A Angle, Tgt MYR2


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