KUALA LUMPUR (Thomson Financial) - Malaysian shares were flat at the end of
the morning session on Friday but the key index was marginally higher led by
plantation and oil and gas stocks following a rebound in crude palm oil (CPO)
futures after crude oil prices continued to hit new highs.
Gains by financial and consumer stocks further supported the market.
Crude oil traded near new all-time highs above $124 on Friday after the OPEC
cartel insisted the market is well supplied and being driven by speculators.
New York's main oil futures contract, light sweet crude for June delivery,
rose 61 cents to $124.30 a barrel in Asian trade after closing at a record
$123.69 at the New York Mercantile Exchange on Thursday.
In after-hours deals, the New York futures contract soared to an all-time
high of $124.57.
CPO tracks the performance of crude oil as palm oil can be used as feedstock
in the making of biodiesel.
The Kuala Lumpur Composite Index (KLCI) was up 2.92 points or 0.2 percent at
1,283.27.
The FTSE Bursa Malaysia 30-large cap index gained 16.19 points or 0.2
percent to 8,327.30 and the FTSE Bursa Malaysia second board index dropped 25.20
points or 0.4 percent to 5,842.45.
Decliners led advancers 289 to 226 with 264 stocks unchanged and 641
counters untraded.
Trading volume was 266 million shares valued at 436 million ringgit.
"The market has been resilient, in line with the performance of global
markets which have been holding up well,'' said Goh Han Hau, a research manager
at Kenanga Investment Bank. "It's an encouraging sign, with the market drawing
strength from the oil and gas and plantation sectors.''
Plantation and energy stocks are expected to continue to outshine the
broader market given record-high crude oil prices, TA Securities said.
The brokerage said overall sentiment appears to be weak but the benchmark
KLCI could continue to trend higher on gains in these sectors.
"Persistent strength in crude oil prices will continue to encourage buying
in plantation and oil and gas stocks, and hence shore up the KLCI," it said.
CPO prices closely track movements on the crude oil markets as the vegetable
oil can be blended with fossil fuel to create biodiesel. Currently, plantation
stocks account for about 20 percent of the KLCI in terms of market value.
Sime Darby, the world's leading palm oil producer and the biggest stock on
the bourse, advanced 1.1 percent to 9.55 ringgit and second-ranked IOI Corp was
up 0.7 percent at 7.15 ringgit.
PPB Group, a diversified plantation group controlled by Malaysian
billionaire Robert Kuok, gained 0.9 percent to 10.90 ringgit. Kulim, which owns
palm oil estates in Malaysia, Papua New Guinea and the Solomon Islands, rose 0.6
percent to 8.00 ringgit.
Oil and gas major Shell Malaysia advanced 1.8 percent to 11.50 ringgit while
Petronas Gas gained 1.0 percent to 10.20 ringgit.
RHB Capital climbed 1.0 percent to 5.30 ringgit after rising to 5.50 ringgit
on news that Abu Dhabi Commercial Bank is acquiring a 25 percent stake in the
bank for 3.88 billion ringgit.
The deal priced Malaysia's fourth-largest lender at 7.20 ringgit a share or
a hefty 37 percent premium to its previous closing price of 5.25 ringgit.
"While the deal will not trigger a general offer for the remaining RHB
Capital shares, it has set a new benchmark for RHB Capital's share price," said
Vincent Khoo, head of Aseambankers Research.
The Malaysian ringgit was quoted at 3.2050/2080 against the U.S. dollar at
midday.
johnkb.tan@thomsonreuters.com
.
jt/ng
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