CONGRATULATIONS TO ALL MALAYSIANS!!!

CONGRATULATIONS TO ALL MALAYSIANS WHO ALLEGEDLY THINK THEY ALREADY MATURED TO DECIDE IN RECENT ELECTION FOR THE SAKE OF NEW DAWN OF MALAYSIA. HERE ARE YOUR FIRST 'VERY GOOD' IMPLICATIONS. WELL DONE GUYS!!!!


Tuesday March 11, 2008

MARKET BOGGED DOWN BY CONCERNS
New Analysis by Joseph Chin

AS investors brace for more bad news from the United States over an imminent recession, Barisan Nasional’s shocking loss added more gloom to the market, sending the KL Composite Index (KLCI) to a 12-month low of 1,173.22 points.

The stock market suffered its biggest loss in its history yesterday, with the KLCI plunging 123 points, or 9.5%, in its worst one-day performance since the Asian financial crisis when the 100-stock index tumbled 95.59 points to 349.56 on Sept 8, 1998.

Of course, the weak Asian markets, which recorded losses of between 1.04% and 4.84% yesterday, also added to the pall over the local market.

Foreign selling on worries over the country’s political future triggered the broad sell-off on Bursa. The loss of Kedah, Penang, Perak and Selangor to the opposition also cast doubts over the fate of the major infrastructure projects slated to be implemented in these states.

There were concerns over whether the Equine Capital Bhd-initiated Penang Global City Centre and the Penang monorail project, led by Malaysian Resources Corp Bhd (MRCB) and Scomi Engineering Bhd, would be implemented. Equine lost more than half its value when its share price plunged 72 sen to 71 sen while MRCB fell 66 sen to RM1.27.

The projects are also part of the Federal Government-initiated Northern Corridor Economic Region, covering Penang, Kedah and Perak.

Investors sold down shares in Kumpulan Perangsang Selangor Bhd, JAKS Resources Bhd and also Puncak Niaga Holdings Bhd on worries that the Pahang-Selangor water transfer project could be affected by the impending change of government in Selangor.

Government-linked counters also came under selling pressure, with Sime Darby Bhd, Bumiputra-Commerce Holdings Bhd, Tenaga Nasional Bhd, Bursa Malaysia Bhd and Telekom Malaysia Bhd among the major losers.

Does the selldown offer any buying opportunities at current levels, especially after RM86.16bil was wiped out from the market capitalisation yesterday?

Fund managers believe the market is oversold, which could mean there are buying opportunities in plantation counters, given that crude palm oil prices are still above RM3,000 per tonne, and these companies are also well-managed and fundamentally strong.

They expect a mild rebound after the heavy sell-off, provided there are no untoward incidents.

However, the caveat is that Malaysia’s political scenario is still fragile while external issues including the US credit market crisis and imminent recession will keep investors on the sidelines at least for a few weeks.

As the head of institutional dealing at a local bank-backed brokerage puts it: “It's like a falling knife; you won’t know when to catch it.”

Source: The Star Online