MALAYSIAN shares are set to extend a rally fuelled by hopes of a nascent economic recovery, although the gains could be clipped by profit-taking, analysts said today.
“As buying momentum balloons towards record highs, more market players are likely to jump in and fire further rallies on lower liners in coming sessions,” TA Securities said in a commentator.
“However, more conservative investors may like to take profits,” it added.
“Buying momentum has been very strong,” an institutional dealer at a bank-backed brokerage told Dow Jones Newswires.
“Many local players (funds) are playing catch-up as some are beginning to feel they have missed the boat and are beginning to chase a number of stocks,” he said with the market up 17 per cent so far this year.
“Investors who have been sitting on the sidelines are now coming back into the market and this momentum could continue to buoy the market in the coming weeks,” he added.
For the week to May 8, the Kuala Lumpur Composite Index closed at 1,026.78, up 36.04 points or 3.6 per cent from the previous week.
TA Securities said that economic indicators showed Malaysia was “probably headed towards a gradual recovery”.
Alliance Research noted that trading volume on the local bourse surged on Thursday to its highest level since February 2007.
“Retail investors returned to the market in droves, buoyed by optimism about the sustainability of the global economic recovery,” it said.
“Their return was most visible in the fact that penny stocks were among the most active counters.”
Malaysia’s government said in March the economy could contract by 1 per cent in 2009 despite a 16.2 billion dollar stimulus package, dumping its earlier target of 3.5 per cent growth. - AFP
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