Abdullah sees 1,350; the Boar charged; and Bursa server wobbles
PM and Finance Minister Abdullah Ahmad Badawi is never known as a market punter, but on the second day of the Year of the Boar, he told people attending the festive celebrations at the Penang Chinese Assembly Hall that if KLCI is "pushed" past 1,350 points, Malaysia will have created a new record.
Yesterday, the first day of trading after the Lunar New Year holidays, share prices on Bursa Malaysia closed sharply higher at 1,278.22 points, up 16.13 points, while the volume was pushed to a record high of 4.699 billion, reports Bernama.
The Star says the KLCI benchmark and trading volume were a record high in 13 years.
Notably, the record trading volume of 4.699 billion shares is worth RM4.066 billion, compared to 2.821 billion shares worth RM2.749 billion when the market closed for the festive season last Friday.
While trading was led by the blue-chip counters, and buying was active across the board, a dealer was quoted by Bernama as saying that buying interest has spread to lower liners with active participation from foreign and local funds.
theSun reports that penny stocks and warrants top the 20 most active counters, while Oriental Daily News reports that retail players were scarce yesterday.
Japan raises interest rates
Also yesterday, the Bank of Japan (BOJ) decided to raise interest rates for the first time in seven months, taking its cue from recent robust economic data.
According to OhMyNews, BoJ had raised the interest rate, by a quarter percentage point to 0.5%, in an attempt to rectify what the central bank itself views as the "abnormal" state of the credit policy.
The BOJ's nine-member policy board, including governor Toshihiko Fukui, made the decision to raise its key short-term interest rate by a vote of 8-1 on Wednesday at the end of its two-day meeting.
Around February 10,the BOJ was still divided in raising interest rate and kept the key overnight call rate target unchanged at 0.25% at in its January policy meeting. It was a rare split vote of 6-3.
How long can the party last, especially for hedge funds which bought into Malaysian stocks using cheap Yen? “We are again in a framework where carry trades work very well. As long as expectations of BOJ hikes remain moderate then shorting yen may be still in the market for some time,” said Umberto Alvisi, currency strategist at Credit Suisse.
BFE server slows down
Saudara Lim Guan Eng may have to hold his breath for a little longer. Punter or not, Abdullah has sighted 1,350 on his radar-screen.
And the market is so hot that, these two days, the BFE server at Bursa Malaysia just could not cope with the huge quantity of orders, and as a result, the updating, matching and confirmation of the orders are slow to reflect on the brokers' trading terminals.
Comments
Thanks to cheap Yen, hedge funds can borrow lots of money with less than 1% interest. They can convert Yen to high-yield currencies or speculate in any market that may appreciate. At the moment, one of their favorites is commodities after recent correction in December 2006. Hedge funds are friends on the way up and foes on the way down. If you follow them, you must have fast fingers. The reason is when they get out of a market, they will leave in drove. Examples are May 2006 for equities and December 2006 for commodities.
Posted by: Small Net Biz Ideas![[TypeKey Profile Page]](http://www.jeffooi.com/nav-commenters.gif)
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February 22, 2007 09:28 AM
election stunts?
Posted by: taiko_besar![[TypeKey Profile Page]](http://www.jeffooi.com/nav-commenters.gif)
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February 22, 2007 09:32 AM
I would also rush into KLSE if I am a foreign hedge fund. Malaysia is playing with a set of weak cards but boasted loudly that she has a strong cash reserve. Isn't that a cardinal mistake when playing poker? People will call in your bluff and make a tidy sum of money at the end.
Posted by: vital9![[TypeKey Profile Page]](http://www.jeffooi.com/nav-commenters.gif)
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February 22, 2007 10:41 AM
Feel good, feel good. Let's call the election now.
Then the foreigners pull their funds out. Then, like experience tells us, all the retailers are left hanging high and dry.
Bukan Malayu saja mudah lupd, kita semua juga begitu. Especially the ah pohs and ah koongs.
Seems like all the retail punters are coming into the market. So, its time to get out, man.
Posted by: Yumcious![[TypeKey Profile Page]](http://www.jeffooi.com/nav-commenters.gif)
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February 22, 2007 10:46 AM
standard procedure b4 election, bullish economy, strong bskl, and may be by end of this feb or march, oil price may go down.........
Posted by: adnero![[TypeKey Profile Page]](http://www.jeffooi.com/nav-commenters.gif)
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February 22, 2007 11:09 AM
The current euphoria on KLSE can be traced to the following;
a) Bursa was really laggard compared to others in Asia, the increase in Bursa has not yet match the increase in regional bourse.
b) Since Thailand floped capital control last month, hot monies have flowed south to Bursa
c) The Ringgit strengthened against the $$$ over the past month, hence hot money will win both i.e. increase in stock prices and in exchange gain.
d) Maybe its the erection euphoria which is being slowly signalled in the papers.
Posted by: Tan Sir Lord Toddie![[TypeKey Profile Page]](http://www.jeffooi.com/nav-commenters.gif)
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February 22, 2007 01:09 PM
I saw PM on TV last night, he looked haggard.
Posted by: art chan![[TypeKey Profile Page]](http://www.jeffooi.com/nav-commenters.gif)
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February 23, 2007 10:48 AM