Thursday, February 22, 2007

KL Composite Index (KLCI) soars to a 13-year high

KUALA LUMPUR: It's a bullish start to the Year of the Boar on Bursa Malaysia.

The Kuala Lumpur Composite Index (KLCI) soared to a 13-year high Wednesday as investors returned in force after the festive holiday to lift the benchmark 16.13 points to 1,278.22.

The broad-based rally also pushed the combined value of all stocks on the bourse to above RM1 trillion.

Two months ago, the combined value of all stocks was around RM870bil.

The buoyant stock market has been a key ingredient in the build-up of the “feel good” economic data in recent weeks, such as record manufacturing approvals of RM46bil last year and total trade exceeding RM1 trillion last year.

The bullish market has lifted shares of brokerage firms as investors believe that these companies will benefit the most from the sharp increase in trading activity.

“The buoyant mood in the market is driving up prices,” a dealer at a local brokerage said, adding that retail participation in the market was growing, as reflected by the sharp increase in trading volume in recent weeks.

Total turnover hit 4.7 billion shares Wednesday, a new high.

The previous record volume was 3.54 billion shares last Thursday.

Penny stocks and low-priced warrants saw brisk trading – an indication of retail participation – with the top 10 most active counters clocking a combined volume of more than one billion shares.

The buying frenzy saw rising stocks overwhelming decliners by 975 to 131 with 101 counters unchanged.

Bursa Malaysia Bhd shares gained 50 sen to a new high of RM12.10. The exchange operator derives the bulk of its income from clearing fees on share trading activities.

Analysts expect that the rising corporate earnings and improved outlook on the economy will help support stocks valuations on the local bourse.

They said the KLCI was now within striking distance of its all-time closing high of 1,314 points set on Jan 5, 1994.

The KLCI's best historical level was 1,332 points hit on the same day.

Also Wednesday, Malayan Banking Bhd – the nation's biggest bank – posted a 24% increase in net profit in the second quarter ending Dec 31.

Top companies like Malaysia Airlines System Bhd and Telekom Malaysia Bhd are expected to release their results by the end of this month.

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