OUTLOOK - NEXT WEEK 24 TO 29 MARCH 2008

BURSA MALAYSIA
Share prices on Bursa Malaysia are expected to stage a better performance next week on increased follow-through buying especially in the plantation, banking and oil & gas related stocks.
An analyst said there was an upside potential for the broader market with support level for the Kuala Lumpur Composite Index (KLCI) ranging from 1,242.64 to 1,296.33 points and resistence at either 1,141.5 or 1,090 points level.

He said the market is likely to start off the week on a choppy note on some profit taking, but would eventually move up by mid-week on follow-through support.

Some speculative interests, mostly on plantation sector will receive further boost on expectations of better crude palm oil (CPO) prices, he said.

“This (higher CPO prices) would initially provide strong support and drive players to enter the market in full force,” the analyst said.
On Friday, CPO price on the physical market stood at RM3,370 per tonne.

The analyst said rotational play, particularly on small-and-mid cap stocks, would also continue to lend support to the market.

He said the KLCI, which had been underperforming in recent days due to the slowdown in the US economy and the uncertain local political landscape, could also make a positive comeback as investors set aside worries about the US

economy following the Federal Reserve’s decision to cut its rates by another 75 basis points to 2.25 per cent early this week.

In the local front, the announcement of a new Cabinet line-up by Prime Minister Datuk Seri Abdullah Ahmad Badawi on Tuesday had also somewhat brought cheers and a breath of fresh air to the market.

In the new line-up, seven ministers who won in the recent general election were dropped while two corporate figures appointed as ministers.

“It is a good line-up and it will strengthen his position in the country’s political arena.

“We can expect good governance coming into the new administration and we can also expect good economic performance in the long term,” the analyst said.

Abdullah announced the appointment of Maybank group president and chief executive officer Amirsham as Minister in the Prime Minister’s Department heading the Economic Planning Unit.

During the shortened trading week with the market closing for Prophet Muhammad’s birthday on Thursday, the KLCI ended Friday’s trade 2.52 points higher at 1,189.06 after opening 3.25 points higher at 1,189.79.

On a week-to-week basis, the KLCI went down 5.78 points to 1,189.06, the Industrial Index lost 46.80 points to 2,479.01, but the Finance Index added 33.47 points to 9,392.74 and the Plantation Index lost 199.76 points to 7,123.28.

Of the FTSE-BM Index series, the FBMEmas fell 107.73 points to 8,036.72 and the FBM30 decreased 52.39 points to 7,907.96.

The FBM2BRD fell 30.25 points to 4,629.32 and the FBM-MDQ was 124.23 points lower at 5,598.30.

Total volume for the week depreciated to 2.331 billion shares valued at RM4.773 billion from 4.361 billion shares valued at RM11.115 billion last week.

Volume on the Main Board declined to 1.719 billion shares worth RM4.628 billion from 3.382 billion shares worth RM10.807 billion the week before.

Second Board volume for the week fell to 140.278 million shares worth RM77.738 million from 266.291 million shares valued at RM155.334 million.

The Mesdaq market’s volume eased to 225.296 million valued at RM58.902 million from 316.157 million shares valued at RM85.165 million previously.

Call warrants went down to 245.875 million shares worth RM8.754 million from 398.289 billion shares valued at RM22.048 million a week ago.

Direct business deals declined to 107.944 million shares valued at RM144.199 million from 233.585 million shares worth RM257.713 million previously. — BERNAMA