Tuesday May 7, 2013

GE13: Stock market in full swing as it rallies to a record high

<b>Keeping a close watch:</b> A man watching the stock share index movement on digital display screens in Kuala Lumpur Monday. —AFP

Keeping a close watch: A man watching the stock share index movement on digital display screens in Kuala Lumpur Monday. —AFP

PETALING JAYA: The stock market rallied to reach a record high of 1,826 as investors and traders came back to the market in full force amid the easing of political uncertainty as Barisan Nasional was returned to power.

In the currency market, the ringgit reached 2.97 against the US dollar as at press time. The last time it was this strong was in May 2011.

Blue chips like CIMB Group Holdings Bhd, Malayan Banking Bhd, Tenaga Nasional Bhd and Genting Bhd shot up to multi-week highs, pushing the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) to close at 1,752, up 3.38%.

Total trading volume surged to 1.9 billion shares compared with less than a billion shares traded daily in the couple of weeks before the general election.

A total of almost RM5bil in trading was done at yesterday's close.

Local funds had generally stayed in the sidelines in the months leading up to the general election although foreigners remained net buyers of Malaysian equities during the period.

“The removal of election risks should now underpin the return of risk appetite with a shift in emphasis to cyclicals,” Am Research told its clients in a market strategy report.

It noted the focus would gravitate towards the continuity of growth policies embedded in the Economic Transformation Programme (ETP).

Hwang Investment Management Bhd chief investment officer David Ng is expecting a surge in buying activities led by foreign and local institutional investors, helped by Malaysia's lagging market performance versus its regional peers, strong economic fundamentals and strong consumer confidence.

He said Hwang, which had been gradually buying Malaysian equities since the end of February, would add on equity weight in sectors that were likely to see post-election flourish, such as those involved in the continuation of nation building and economic development.

“These are the oil and gas, financial, construction and media sectors, in which the latter is a result of stronger consumer confidence and discretionary spending.”

For more election stories, please visit The Star's GE13 site

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