BURSA MALAYSIA: KL Shares Likely To Be Lower Next Week

KUALA LUMPUR, Oct 4 (Bernama) -- Bursa Malaysia is likely to be lower next week as investors are expected to take a cautious stance over the developments in the US financial crisis, dealers said.

They said the benchmark Composite Index is however expected to stay above the 1,000 level despite the uncertainties in the US economy with support seen from institutional investors.

The market will also be watching the share price movement of Maybank,which fell close to a five-year low on Friday.

During the week just ended, the market was mainly lower as most investors stayed away due to the festive holidays and as such not much activity was seen.

The market was also closed on Wednesday and Thursday for the Hari Raya celebration.

Maybank's shares which resumed trading on Friday after being suspended on Monday and Tuesday, fell close to the five-year low following the completion of its acquisition of a 55.6 per cent equity interest in PT Bank Internasional Indonesia (BII) for RM4.26 billion (SGD$1.77 billion).

It closed on Friday 30 sen lower at RM6.60, after chalking up a low of RM6.50.

While the acquisition would enable Maybank to be the largest foreign bank in Indonesia and the fifth largest overall, the market was unhappy as the purchase price was considered too high despite a rebate from the sellers.

Maybank had announced on Tuesday that Fullerton Financial Holdings and Kookmin Bank,the stakeholders of the BII shares, had agreed to provide a combined rebate of RM758.9 million (SGD$315.2 million) for the total purchase consideration.

The arrangement resulted in the implicit price payable per BII share reduced to Rp433 from Rp510.

An analyst said the deal remained expensive despite the rebate.

He said investors did not view the acquisition positively in view of the current market situation, especially with the financial turmoil in the US credit market.

On a Friday-to-Friday basis, the KLCI declined to 3.83 points to 1,016.70 from 1,020.53 the previous Friday.

The Industrial Index slipped 5.13 points to 2,226.57 from 2,231.70, the Finance Index decreased 41.83 points to 8,219.99 from 8,261.82 and the Plantation Index lost 267.85 points to 4,734.59 from 5,002.44.

In the Financial Times Stock Exchange-Bursa Malaysia (FTSE-BM) Index series, the FBMEmas shed 16.81 points to 6,744.91 from 6,761.72, the FBM30 fell 9.20 points to 6,562.92 from 6,572.20, the FBM2BRD slipped 1,021.84 points to 3,974.63 from 4,996.47 but the FBMMDQ increased 974.94 points to 4,932.17 from 3,957.23.

Overall, activities were reduced compared with the previous week as the market only saw trading for three days.

Total volume for the week decreased to 973.654 million shares valued at RM2.019 billion compared with last week's 1.930 billion shares worth RM3.557 billion.

The Main Board volume eased to 820.431 million units valued at RM1.992 billion from 1.657 billion units worth RM3.490 billion previously.

Volume on the Second Board declined to 37.543 million shares valued at RM15.184 million from 93.257 million shares worth RM45.928 million the week before.

On the Mesdaq market, volume fell to 29.051 million units valued at RM9.027 million from 66.606 million units worth RM16.042 million previously.

Call warrants fell to 86.630 million shares valued at RM3.173 million from 112.755 million shares worth RM5.143 million last week.

Direct business deals slipped to 158.112 million units valued at RM357.291 million from 413.968 million units worth RM636.851 million previously.