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Asian markets up on US accommodative stance

KUALA LUMPUR: Most key Asian markets advanced after the US Federal Reserve said interest rates would be kept at near-zero levels until late 2014.

The Fed said in a statement that it expected to maintain a highly accommodative stance for monetary policy in the world’s largest economy.

At the close, Tokyo’s Nikkei 225 was down 0.39% to 8,849.47 points while Hong Kong’s Hang Seng Index rose 1.63% to 20,439.14, Shanghai’s A share index was 1% higher at 2,319.12 and South Korea’s Kospi Index rose 0.25% to 1,957.18.

The benchmark FTSE Bursa Malaysia KL Composite Index (FBM KLCI) closed higher by 0.27% to 1,523.86 points and Singapore’s Straits Times Index rose 0.1% to 2,894.43.

ECM Libra Capital head of research Leong Hon Sze told StarBiz that the local bourse had limited upside in the near term as it was relatively high compared with some of the markets in Asia.

“Our target for the benchmark FBM KLCI in the first half of 2012 is 1,520 points, and it is presently holding up in this region.”

Leong said fund managers seemed to be favouring Asean markets such as Malaysia, Indonesia and Thailand.

“Singapore is lagging behind us. The regional markets, which have been buoyed by ample liquidity from the United States and Europe, appear to be largely indifferent to the Greek debt issue nowadays.”

ECM Libra Capital’s year-end target for FBM KLCI is 1,600 points.

Leong recommended investors to look at stocks that had bombed out for higher upside potential.

He noted that the share prices of companies such as Unisem (M) Bhd and Malaysia Airlines had seen a rebound recently.

Meanwhile, TA Securities Holdings research head Kaladher Govindan believes there would be further upside momentum for FBM KLCI in the near term.

“The momentum will continue next week after the Chinese New Year holiday. We think the local bourse will test the previous high of 1,597 points in the late first quarter,” said Kaladher.

However, he is expecting a volatile year ahead for FBM KLCI.

“The theme will be choppy market undercurrents due to concerns over the eurozone’s debt woes. Another factor is a possible slowdown in the pace of China’s economic growth. Another dampener would be when Malaysia’s general election is called, as investors wait for the outcome,” said Kaladher.

Kaladher said there should be a market correction, where the local bourse may slide to the 1,300-point range in the third quarter.

“Our year-end target for the FBM KLCI is 1,520 points,” he said.

 

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