Malaysian shares prices closed 0.70 percent higher on Monday but trade was mixed amid continued jitters over the US subprime mortgage crisis, dealers said. The Kuala Lumpur Composite Index (KLCI) gained 8.78 points to 1,296.48.
Losers led gainers 519 to 333, with 217 stocks unchanged and trading volume was low at 869.14 million shares, valued at 1.49 billion ringgit. "The market is still cautious, and will continue to be so until investors get a clearer picture of the US subprime fallout," said Cheah King Yoong, head of research at SJ Securities.
"In the immediate term, I would expect the market to move sideways," he said. Cheah said he expects an earlier recovery for the local bourse if the pumping in of funds by the US Federal Reserve, European Central Bank and the Bank of Japan help to stabilise global markets. "I think that the injection of liquidity by central banks is a good move that has already started to get positive feedback," said Cheah.
He also expects the market to see a pre-budget rally soon. "Eight times out of 11, the market has seen a pre-budget rally, and I think there is a good chance for that to happen this year as well," Cheah said.
Malaysia is expected to unveil its 2008 budget on September 7. Among index heavyweights, national power supplier Tenaga was down 10 sen at 10.50 ringgit, while Telekom Malaysia was up five sen at 9.80 ringgit and Malaysia's largest lender Maybank added 10 sen to 11.50 ringgit.
Budget carrier AirAsia was unchanged at 1.94 ringgit on profit-taking after gaining earlier following British billionaire Richard Branson's confirmation that the Virgin Group is buying a 20 percent stake in AirAsia X, Malaysia's first long-haul budget carrier.
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