Review: The week ended 18/4/2008

The KLCI rose as selected plantation and oil & gas-related stocks rose on continued firmness in crude palm oil prices and record oil prices. Sentiment was also lifted by the rebound in U.S. equity markets towards the end of the week. The KLCI closed a 6-week high of 1,267.6 points for a gain of 1.7% for the week.

Average daily trading volume during the week remained unchanged at 0.5 billion units while average trading value fell to RM1.1 billion from RM1.4 billion in the preceding week.
On Wall Street, the Dow rose to the highest in three months as the latest set of 1Q2008 corporate profits for selected stocks were better-than-expected. The Dow rose by 4.3% to 12,849 points while the Nasdaq closed higher by 4.9% to 2,403 points over the week.

The U.S. headline inflation rate was sustained at 4% in March. However, the core inflation inched up to 2.4% in March from 2.3% in February on higher housing and transportation costs. U.S. retail sales growth decelerated to 0.1%in March from 7.1% in February due to lower sales of vehicles and furniture. U.S. housing starts contracted by 11.9% month-on-month to a 17-year low of 947,000 units in March after declining by 0.7% in February.

Crude oil prices rose to a record high of US$116.70/brl on 18th April to register a weekly gain of 5.9% on concerns that the Organisation of Petroleum Exporting
Countries (OPEC) would not increase oil supplies. OPEC's next meeting will be on 9 September 2008.

On the local front, manufacturing sales growth rose to 21.1% in February from 15.8% in January on higher sales of refined petroleum products. Malaysia’s foreign reserves decreased by RM8.6bil in the last two weeks of March to RM384.7bil as at 31st March 2008 compared to an increase of RM9.1bil in the first two weeks of March. The decline in reserves was due to the quarterly adjustment of foreign exchange revaluation losses as the Ringgit strengthened against major currencies in 1Q2008.

The Ringgit registered a weekly gain of 0.3% against the U.S. dollar to close at a 1-week high of RM3.142. On a year-to-date basis, the Ringgit has appreciated by 5.6% against the greenback.

Source: Public Mutual Market Wrap