Rally extends into May

KUALA LUMPUR: Asian stock markets extended their nearly two-month old rally, kicking off the month of May on a distinctly stronger footing.

Investor confidence was buoyed, in part, by the latest April manufacturing figure out of China, which showed an expansion for the first time in nine months. The uptick, coupled with recent clutch of positive economic data, underscored hopes that the worst of the global recession is behind us.

Investors will continue to monitor upcoming data, including the stress test results for US banks and employment numbers out later this week, for justification to push shares even higher.

Bellwether indices in Hong Kong, Singapore and Taiwan ended the first trading day for the month sharply higher. Stock index futures pointed to a positive open on Wall Street. Shares on the Bursa Malaysia also traded broadly higher on Monday.

The KL Composite Index opened with strong gains and held its ground despite some profit taking during the day. Buyers eventually gained the upper hand pushing the KLCI above the 1,000-point mark. The benchmark index ended the day almost 19 points higher at 1,009.4 points.

Market breadth too stayed in positive territory throughout the day. At the close, gaining counters outnumbered losing ones by roughly seven to two. Some of the big gainers were Shell, Bumiputra Commerce, Tanjong plc, Bursa Malaysia, Parkson and Public Bank.

Plantations stocks also fared well. Crude palm oil futures traded on the Bursa Derivatives surged on the back of tight global inventory for edible oils. The benchmark CPO futures traded as high as RM2,800 per tonne during the day.

Trading volume on the local bourse was robust with nearly 1.75 billion shares changing hands. KNM was, by far, the most actively traded stock for the day. The stock accounted for almost 11% of total market volume. Much of investor interest was focused on lower liner stocks. Some of the most heavily traded counters were Palette Multimedia, Ramunia, Olympia, SAAG and Mulpha.

Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.