KLCI Rallies To New High On Strong Earnings

By IZWAN IDRIS

PETALING JAYA: Shares on Bursa Malaysia rallied to a new high yesterday, fuelled by improved investor appetite for stocks amid a healthy outlook for corporate earnings and favourable domestic economic conditions.

Plantations companies IOI Corp Bhd and Kuala Lumpur Kepong Bhd advanced after the benchmark crude palm oil (CPO) futures contract hit RM2,800 a tonne for the first time.

Other top gainers included SP Setia Bhd and exchange operator Bursa Malaysia Bhd, partly on speculation that foreign funds were buying in as the appreciating ringgit raised the appeal of quality local companies.

The benchmark KL Composite Index rose 20.08 points, or 1.46%, to close at 1,398.35 yesterday.

“Some of the results announced by blue-chip companies during this reporting season were fantastic,'' MIDF Amanah Investment Bank analyst S. Sharath said.

Bursa, Public Bank Bhd and DiGi.com Bhd were among the top companies that reported strong profits for their most recent quarter. All three stocks were traded to record highs yesterday.

But heavyweight Tenaga Nasional Bhd (TNB) shares were down 20 sen at RM9.25, despite reporting on Thursday a big jump in earnings for the year ended Aug 30.

Most analysts, however, maintained their “buy'' call on the counter, largely due to the company's cheap valuation versus other big-cap stocks on the bourse.

TNB shares have fallen 15% year-to-date against the KLCI's 25% rise during the same period.

Shares in Hong Leong Bank Bhd also gained yesterday, putting on 35 sen to RM6.25, after the bank said it would take a stake in a small-sized commercial bank in China.

Rising share prices around the region also boosted local sentiment, despite record high crude oil prices and the sluggish performance of US stocks overnight.

All major regional indices were up except New Zealand and Vietnam's. South Korea's Kospi Index led the advances with a 2.6% gain.

In Hong Kong, the Hang Seng Index powered to a fresh high of 30,405 points, or up 1.8%.

The Nymex crude oil futures contract spiked up to above US$92 a barrel in Asian trade yesterday, ahead of the US session. In London, the Brent was above US$88 per barrel in early trading.