Malaysian market near one-year low

Another blow to KLSE market with analyst say it stock near one-year low !!
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Financial stocks lead declines on concerns over eurozone’s widening crisis
PETALING JAYA: The sell-offs last month amid bearish sentiments have sent the local bourse's benchmark index to levels not seen since last September when talk of further merger and acquisition activities drove the market higher.
Markets in the region closed lower with financial stocks leading the declines on concerns over the euro-zone's widening crisis while prospects for global growth looked ever gloomier.
At Bursa Malaysia, losers outpaced gainers 423 to 253 while 279 other counters were traded unchanged. There were 706.60 million shares traded with a total turnover of RM1.51bil.
Affin Investment Bank Bhd research head Andy Ong said in a report that last month saw the steepest monthly outflow of net foreign selling from the local equity market since October 2009.
“The August 2011 outflow is almost triple the RM1.3bil outflow in May 2010, a heightened period of risk aversion on concerns of eurozone's sovereign debt strain,” he said, adding that the consolidation in April/May last year saw Asian markets pull back 7% to 23% similar to the recent sell-offs.
Foreigners sold RM3.8bil of equities in August as they fled to safe-haven investments such as gold, yen, Swiss franc and US Treasuries.
Ong said the previous sharpest selldown was in February this year amounting to RM3.4bil during the regional portfolio re-balancing exercise that saw a shift in funds out of emerging markets into the more cyclical North Asian and developed markets.
Analysts have revised their year-end targets for the FBM KLCI and have recommended for now a sell-into-rebound strategy as the outlook remains unclear with external negative news flows coupled with weaker earnings dampening investor sentiments.
Maybank Investment Bank Bhd acting research head Wong Chew Hann said in another report that there could still be some near-term downside potential as August's net activities reversed out just 58% of the total net foreign buying in April to July.
“We expect volatility to persist with growing uneasiness in the eurozone and United States,” she said.
World Bank president Robert Zoellick told Bloomberg in an interview yesterday that risks to the global economy was intensifying with the euro-zone's outlook dependent on right decisions being taken by policymakers.
“We're moving into a dangerous period,” he said, adding that the 17-member currency union was facing a particularly sensitive time.
European markets opened higher although trading was volatile with the Stoxx Euro 600 Index opening lower. US equity futures were down with the S&P 500 futures shedding 1.53% and the Dow Jones futures dropping 1.45% at 5pm.
Spot gold, which surged to above US$1,920 per ounce, hovered around US$1,890 at press time while US Treasury yields fell as demand rose. Nymex crude oil was US$1.75 lower at US$84.70 per barrel at press time while crude palm oil for December delivery hovered below RM3,000 per tonne.

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