Investors seen locking in profits ahead of festival

Malaysian investors are likely to remain cautious in the week running up to the Lunar New Year, after Asian equity markets fell late last week following overnight losses on Wall Street.

Analysts expect investors to continue locking in their profits this week, while volumes will ease due to the cautious sentiment.

Kenanga Investment Bank Bhd research head Yeonzon Yeow said that small/mid-cap stocks were likely to outperform the rest of the stock market, after the substantial sell-down in big-caps.

Analysts also expect global market volatility to continue as investors appear uncertain whether world growth can support the equities market, given the release of bearish economic data last week.

On the home front, stocks that will continue to draw interest this week include Scomi Marine Bhd and KNM Group Bhd. The two companies made major announcements last week.

Scomi Marine said late last Friday that it was selling its entire 29.07 per cent stake in the Singapore-listed CH Offshore Ltd for close to RM350 million.Giving away 8,888 Free Cards! Get your Tune-In Card now!


The disposal will result in net gain of RM63.6 million after accounting for estimated expenses of RM3.4 million.

The stock, which will resume trading today, last traded at 47.5 sen on Thursday.

Meanwhile, KNM gained 6.5 sen to 81.5 sen on Friday, after its founder and other investors said they planned to take the company private.

The Malaysian stock market benchmark was on an uptrend at the start of last week, but began a downward slide on Thursday as weakness on Wall Street weighed on sentiment.

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) fell 17.13 points to end at 1,247.9 points on Friday, in line with weak Asian equity markets that took their cue from Wall Street, which fell after news of a rise in US unemployment benefits.

Markets were also affected by concern over the European sovereign debt problems.

However, a late rally on Wall Street last Friday saw US stocks ending slightly higher after a volatile week.

The Dow Jones Industrial Average erased its intra-day losses by ending 10.05 points higher at 10,012.23. The Standard & Poor's 500 Index was 0.29 per cent up at 1,066.19, while the Nasdaq Composite Index was 0.74 per cent higher at 2,141.12.

While the FBM KLCI may slide to 1,220 points, analysts expect the index to find its support level at 1,200 points.