KLCI Shoots Past 1,400 Points

PETALING JAYA: The KL Composite Index (KLCI) yesterday crossed 1,400 points for the first time as plantation stocks led by IOI Corp Bhd and Kuala Lumpur Kepong Bhd soared after the crude palm oil price breached RM2,900 per tonne.

Other market heavyweights posted sharp gains on strong foreign interest, with Bursa Malaysia Bhd and Bumiputra-Commerce Holdings Bhd among the biggest advancers.

The KLCI surged 13.27 points, or nearly 1%, to 1,411.62 yesterday for the third consecutive day of double-digit gains and the fifth straight session of advances.

Total market turnover rose to 2.12 billion shares worth RM2.57bil, compared with last Friday's volume of 1.9 billion shares valued at RM2.2bil.

Shares in exchange operator Bursa Malaysia led gainers, advancing RM1.60 to a new high of RM16.30 amid expectations that rising trading volume would translate to higher income.

Dealers said local sentiment had been firming up over the past few days, fuelled by growing corporate earnings and improving outlook for the domestic economy.

The local bourse also benefited from rising stock prices across Asia, with the indices in South Korea, Hong Kong, Australia, Indonesia and India closing at record highs yesterday.

A bank-backed brokerage, in its weekly outlook yesterday, said the global equity outlook continued to remain upbeat despite soaring crude oil prices and lingering concerns over the health of the US economy.

Another brokerage, Inter-Pacific Research, sees an exciting week, with a steady flow of economic news hogging the headlines.

Analysts said the market broadly was expecting a further cut in borrowing costs at the US Federal Reserve's policy meeting tomorrow.

The US is also expected to release its third-quarter gross domestic product (GDP) data this week.

An interest rate cut would help boost the sagging US economy, which is facing a slump in the housing sector. Such a move would, however, weaken the dollar and stoke inflation in the world's biggest economy.

The greenback fell to a record low against the euro yesterday and continued to weaken against other currencies, including the ringgit.

Analysts said the weak dollar had contributed to rising crude oil and gold prices.

The Nymex crude oil breached US$93 per barrel for the first time in Asian trade yesterday, while spot gold hit US$793 an ounce – its highest since 1980.

Crude oil – which has surged 63% year-to-date – has fuelled demand for palm oil as an alternative fuel source.

The price of the country's main agricultural commodity export has risen almost 50% this year.