Monday June 7, 2009

WEEKLY MARKET REPORT.


Friday Markets Closing Prices.

KLCI 1075.50 up 11.83 or 1.08%.
DJIA 8,763.13 up 12.89 or 0.15%.
Crude Oil US$68.44.
August FCPO RM2,529.
Gold US$962.60.
Natural Gas US$3.87.
Ringgit 3.4930.


STOCK MARKET OUTLOOK.

BUY Index Linked Blue Chips especially in Plantation and Financial sectors (non shariah compliant except BIMB and Takaful Malaysia) for investment and Bursa quality lower liners especially in Oil & Gas and Construction sectors for trading.

KLCI resistance at 1100 and 1200 level while the support level at 1050.

Positives news flow such as S&P Rating Services has affirmed its “A-/A-2” foreign currency and “A+/A-1” local currency sovereign credit ratings on Malaysia with stable outlook should augur well for the stock market. Moreover, Bank Negara Malaysia foreign exchange reserve as at 29 May 2009 amounted to RM322.5 billion or US$88.3 billion up slightly from US$88 billion as of 15 May 2009.

Meanwhile, the U.S. registered better that expected job losses for May but the unemployment rate hit a 25 year high of 9.4 percent.

Including those who’ve stopped looking for work because they are discouraged by employment prospects and those working only part-time who prefer a full-time job, the jobless rate would’ve jumped to 16.4 percent in May, the highest level since comparable records began in 1994, from 15.8% in April.

Fed Chairman said while economic growth will return “later this year”, unemployment will rise “into next year”.

While the economy is showing signs of stabilizing, its “way to early” to say the contraction is over said the Head of the National Bureau of Economic Research Cycle Dating, the group that officially makes the call.


STOCK RECOMMENDATION

BUY SIME DARBY BHD at RM6.95 as the Chinese government has appointed them to lead the development of 600 sq km area in Weifang, Shandong Province in China during the Malaysian Prime Minister recent visit to China.

Current Sime Darby Bhd investments in China already generate RM3.8 billion in revenue and RM187 million in profits.


For further inquiries please call:-

Kamel Bin Mohd Yusoh.
Institutional Dealer.
Kenanga Investment Bank Bhd.
013-6306544 or 03-21644549/50.
May 7, 2009.