The benchmark Kuala Lumpur Composite Index fell 16.09 points to close at 869.34, the steepest decline since January 8. April index futures, the most active contract, slid 2.4 per cent to 863.00. Just eight stocks rose on the 100-member gauge.
The benchmark stock measure has fallen 0.9 per cent this year, set for its fifth quarterly decline. In the market, 364 million shares changed hands today, lower than the three-month daily average of 402 million shares.
TA Securities in its research note said while the technical momentum indicators for the KLCI improved further after last week’s strong rally, weaker buying is likely to draw out stale bull sellers this week to check the upside.
Also, completion of the Umno elections, together with the likelihood of a further downward correction for US stocks this week due to fears that American banks will need to report large derivative losses, should grease the downside and increase profit-taking pressure," it said.
It also said that investors can expect strong resistance from last week's high of 890 to cap an immediate upside, with the 900 psychological resistance acting as a formidable ceiling.
EON Capital Bhd fell 5 per cent to RM2.68, the most since November 20. The bank is considering raising funds in a rights offer, a Edge newspaper reported, citing people it didn’t identify. Primus Pacific Partners Ltd, the Hong Kong investment firm that owns 20 per cent of EON Capital, has agreed to underwrite any rights offer, according to the paper. EON chief executive officer Albert Lau Yiong couldn’t be immediately reached for comment.
Gamuda Bhd fell 2.9 per cent to RM1.99, the largest drop since February 20. Malaysia’s second-biggest builder had its stock rating cut by Deutsche Bank because of deteriorating construction margins and limited “visibility” on new order replenishment. The company was reduced to “hold” from “buy” and its target price lowered 34 per cent to RM2.10, Deutsche said in a report.
Trans-Asia Shipping Corp slumped 14 per cent to 60 sen, the steepest decline since September 11. The company said major shareholder Nippon Yusen K.K., Japan’s largest shipping line, obtained an exemption from making a mandatory offer for the rest of the Malaysian company’s stock. Malaysia’s Securities Commission granted the exemption, Trans-Asia said in a statement. Nippon Yusen raised its stake in Trans-Asia to 61 per cent from 28 per cent.
TM International Bhd slid 7.1 per cent to RM2.21, the lowest level since March 18. Malaysia’s state-controlled mobile-phone operator had its stock rating cut to “neutral” from “outperform” by Macquarie Group Ltd which lowered its 2009, 2010 and 2011 earnings estimates because of a rights offer. - AFP, Bloomberg