MONEY SPECIALIST

The benchmark KL Composite Index (KLCI) breezed pass the 1,400 points on persistent buying from both local and foreign funds as the East Cost Economic Development (ECER) was being unveiled. The uptrend was also in line with the sharp gains on Wall Street last Friday coupled with the stronger ringgit. The ringgit rose further against the US dollar to a new 10-year high of 3.338. The near-term stock market’s prospects is moving from bearish to cautiously bullish.

At this point, liquidity is fluid and it’s basically a trading-oriented market, so it can actually go in reverse direction anytime. Optimistically, the positive momentum could last through the final quarter of the year. A 1,500 year-end target could be achievable for the KLCI. Many foreign funds are back in the market but are being cautious by only buying stocks that are liquid, thus ensuring that they have a fairly easy exit should the market turn for the worse.

Even though KLCI has hit record high, it is an unhappy fact that the benchmark index has been under-performing compared to regional markets. The KLCI closed at another all-time high of 1,412.79 yesterday, up 1.17 points, or 0.1%, from Monday’s record of 1,411.62.  As at yesterday, the KLCI had risen 28.88% since Jan 3. At this level, the performance of the KLCI was below that of Jakarta, which gained 47.49% in the same period, and Bangkok, up 33.36% since the start of the year. The KLCI result could have been affected by the waning interest during the third quarter, when the confidence of investors in the stocks dropped.

This entry was posted on Wednesday, October 31st, 2007 at 3:32 PM and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.