KUALA LUMPUR (Jan 9): The FBM KLCI could extend its gains on Thursday, albeit limited, ahead of a planned mass rally in Kuala Lumpur this weekend.
Gains on Bursa Malaysia are likely to be capped due to the scarcity of fresh corporate developments in recent weeks.
Unless the rally develops into a deeper political crisis, it would be a non-event as far as the local stock market is concerned, say analysts. Investors at the local stock market would also take a leaf from the improved sentiment at most global markets.
Global stocks staged a modest recovery from two days of losses on Wednesday after aluminium giant Alcoa opened the US earnings season with an optimistic outlook for world demand, according to Reuters.
However, with the European and UK central banks due to hold policy meetings on Thursday, Spain to test demand for its debt and China to release its latest trade data, investors were in a cautious mood, it said.
Affin Investment Bank Bhd vice-president and head of retail research Dr Nazri Khan in an email reply to theedgemalaysia.com said that in the unlikely event the mass rally (planned by the Opposition this weekend) deepened into a political crisis, the weekend rally would only be a one-off peaceful democratic campaign with minimal impact.
Further, Nazri said there were enough catalysts and momentum in the economy now from an investment and stock market perspective with the FBM KLCI at an all-time high and on the verge of breaking the 1,700-point psychological level.
"In the worst case scenario, where the rally may involve confrontations between the riot police and some bad protestors, we believe it will only affect business sentiment in KL city, but may not be big enough to have an impact on the broader market and economy. Ultimately, we believe the dissolution of parliament and the 13th general election polling date as more important than the rally on the direction of market sentiment and business confidence," he said.
Among the stocks that could in focus on Friday are MQ Technology Bhd, S P Setia, Sime Darby Bhd.
MQ Technology said it would be adversely impacted in the fourth quarter of 2012 due to the cash embezzlement at its wholly-owned unit MPT Solution Co Ltd (MPTS) in Thailand. The company was responding to a query by Bursa Malaysia Securities.
It also said the internal investigation into the cash embezzlement at its subsidiary would be completed by the first quarter of 2013, and that the estimated losses were about RM1.7 million and would be recognised in its financial results for the fourth quarter ended Dec 31, 2012.
Meanwhile, Circus West at the Battersea Power Station development is set to go on sale on Thursday for British buyers, with the sales launch in Malaysia on Saturday.
The Battersea Power Station, a British icon, had been depressed by multiple failed redevelopment projects since the building ceased operations in 1982. A consortium comprising Malaysian companies S P Setia Bhd, Sime Darby Bhd and the Employees Provident Fund successfully purchased the building for £400 million in September on a 40:40:20 equity basis. The gross development value of the first phase is expected to be around £900 million.