Sagging Malaysian bourse still among world's best: analysts

Sagging Malaysian bourse still among world's best: analysts

KUALA LUMPUR (AFP): The Kuala Lumpur Stock Exchange (KLSE), whose indices have touched worrying lows recently, is regaining strength after nearly three months of "recuperating" from a super bull run, analysts said Thursday.

"The Malaysian stock market is still one of the most dynamic in the world," said Gary Wagner, a visiting American stock analyst, adding there were indications the market had bottomed out after its key stock gauge slid from an all-time high of 1,314.46 points on Jan. 5 to close at 954.18 on March 21.

Wagner, an advocate of the Japanese candlestick charting method, allayed local investors' fears the Malaysian bourse was turning bearish, saying the market was supported by strong economic fundamentals.

"Recent events on the KLSE are typical of a bull market retracement, reflecting profit-taking after an incredible bull run," Wagner told a seminar on candlestick charting here.

The KLSE's key composite index rose 163 points from last October to hit the 1,000 mark by Dec. 1, and went on to soar another 300 points to an all-time high of 1,314.46 on Jan. 5.

But the index has taken a beating since Jan. 10, after the economic adviser to the government, Daim Zainuddin, warned investors the market had gone up "too steep, too fast."

Wagner said the index had shown signs of a potential rebound on Tuesday when it gained 10.35 points -- a substantial rise given the current listing lethargy -- to close at 961.78. It closed at 966.77 on Wednesday.

Bradley Matheny, another American analyst who spoke at the seminar, said if the index was able to stay above the 950-point level, it could move on to 1,150 and gradually touch newer heights.

Wagner said as much as 80 percent of the patterns on the KLSE could be identified using candlestick charting, a technique developed by Japanese rice trader Sokyu Honma more than three centuries ago.

It emphasizes the relationship between opening and closing prices on an exchange rather than the ties between closing prices and closing prices the previous day.