Sime, IOI drag market lower at midday

Monday April 14, 2008
Sime, IOI drag market lower at midday

KUALA LUMPUR: Market sentiment weakened in the later part of the morning session on Monday, dragging the KLCI down 1.12% at midday, but losses were less compared with major Asian indices which fell between 1.8% and 4.44%.

At midday, the KLCI skidded 13.95 points to 1,232.84, the FBM Emas lost 94.67 points to 8,326.66 while the FBM Second Board fell 76.13 points to 5,698.93.

Turnover was thin with 166.81 million shares done valued at RM352.23mil. Declining stocks beat advancers 462 to 69 while 151 counters were unchanged.

Asian markets tracked the losses on Wall Street last Friday after General Electric shocked the markets with its weak earnings outlook.

Shanghai’s A Share Index lost 4.44% or 162.63 points to 3,502.20; Japan’s Nikkei 225 down 3.21% to 12,896.10, Hong Kong’s Hang Seng Index declined 3.3% to 23,854.66 and Singapore’s Straits Times Index lost 2.67% to 3,043.28.

Light crude oil was at US$109.62 (RM346.45) per barrel while crude palm oil futures rose RM7 to RM3,461 per tonne. The ringgit was quoted at 3.1605 to the US dollar.

At Bursa Malaysia, heavyweight plantation stocks Sime Darby and IOI Corp were among the major losers. Sime fell 25 sen to RM8.85 while IOI Corp lost 30 sen to RM7, accounting for 2.74 points and 3.35% decline on the 100-stock KLCI.

Other plantation stocks which also fell were KL Kepong, down 40 sen to RM16.10 and Sarawak Oil Palms 25 sen down to RM5.35 while Batu Kawan gave up 30 sen to RM10.

Analysts said they were maintaining an overweight on Sime Darby and IOI Corp and their crude palm oil price assumption was RM3,150 per tonne in 2008 and RM3,000 in 2009.

“IOI Corp remains fundamentally the strongest. However, on valuations, Sime Darby is now offering value as it has been the biggest underperformer in the sector, and shares are trading close to our floor value of RM8.70 per share in our stress test dated March 26,” said JP Morgan.

Nestle was the top loser, down RM1 to RM28, BAT lost 50 sen to RM43, MISC declined 35 sen to RM8.90 while Bursa fell 30 sen to RM8.45.

RCE Capital was the most active with 5.95 million shares transacted. It ended the morning session one sen lower at 60 sen.

PPB was the top gainer after it declared a special dividend of 62 sen for the year ending Dec 31, 2008. The dividend will be payable on May 12.

Hexagon-WA jumped 29 sen to 44 sen and Pensonic-WA 17.5 sen higher at 25 sen. DiGi and Mudajaya 10 sen lower to RM23.80 and RM3.50.