03-08-2006: Unclear outlook

Stocks on Bursa continued to tread water on Aug 3. The benchmark KL Composite Index traded within a narrow band while mild selling pressure was observed on lower-liner stocks.

Investor ambivalence will likely prevail in the near term. High crude oil prices, in particular, are expected to keep markets on edge. Crude futures on the NY Mercantile Exchange are now trading above US$75 (RM276.13) per barrel.

The KLCI closed just over a point higher at 935.3 points. But market breadth was slightly negative with losing counters outnumbering gaining ones by a ratio of 1.3 to one. Market volume was relatively steady at 550 million shares.

UEM Builders and UEM World were among the most actively traded stocks on Aug 3 after the UEM Group secured the contract to build and manage the proposed second Penang bridge. The concession is one of the major projects to be rolled out under the 9th Malaysia Plan.

Telekom Malaysia closed marginally higher at RM9 after releasing a pretty solid set of 2Q06 earnings results. Although its local fixed line and mobile businesses remain under pressure, investments overseas are beginning to bear returns. The company proposed an interim dividend of 16 sen per share.