KLSE Bursa and techs (RAYTECH KLSE): May 2013

Sunday, May 5, 2013

KUALA LUMPUR, May 6 — Stocks surged as much as 6.8 per cent this morning and the ringgit jumped to a 10-month high, after Barisan Nasional (BN) extended its 56-year rule and fended off a strong opposition challenge that had unnerved investors. The benchmark FTSE Bursa Malaysia KLCI Index rose to a lifetime high of 1,808.90 by 9.02am in response to yesterday's general election, with stocks linked to the coalition and its favoured tycoons gaining handsomely, Reuters reported this morning.
BN won 133 seats in the 222-member Parliament in the election, although it failed to regain the two-thirds majority it lost for the first time in 2008.
It also lost the popular vote.
With all results in, BN polled 5.220 million votes to Pakatan Rakyat’s 5.489 million, for a deficit of 269,130 votes based on calculations by The Malaysian Insider. The Election Commission has yet to release the official results.
This was proportionally down from the 4.082 million votes the coalition polled in Election 2008, against the 3.796 million that the parties of PKR, the DAP, and PAS collected then.
The last time an Umno-led coalition lost the popular vote was in 1969, then contested by BN's predecessor, the Alliance Party.
But the repercussions of its win were felt beyond Malaysian shores.
In Sydney, shares in Australia's Lynas Corp Ltd, which has a rare earth plant in Malaysia, surged as much as 18 per cent today.
Lynas' US$800 million (RM2.4 billion) rare earth plant in Malaysia — the world's biggest outside China — finally began production in November after lengthy environmental and safety disputes with residents and the Save Malaysia Stop Lynas and Stop Lynas Coalition protest groups since construction began two years ago.
Lynas last traded at A$0.59 at 0123 GMT (9.23am Malaysian time), surging 18 per cent.
"The market should rally strongly as Barisan National won more than expected. Many had forecast 120 to 125 (seats) as a base case," Chris Eng, head of research at Etiqa Insurance & Takaful Bhd, told Reuters.
Following the opposition's unexpectedly strong gains at the last general election in 2008, the Kuala Lumpur benchmark stock index fell more than 10 per cent in a single day. Some polls had shown the opposition gaining on the BN in recent weeks, raising the prospect of a hung parliament or even an opposition victory.
"The stock market doesn't like uncertainty," Pong Teng Siew, head of research at Kuala Lumpur-based Inter-Pacific Securities, said before the election results. "If BN wins or gets the two-thirds majority, I think the market will rally."
The main index fell 1.1 per cent on Friday to its lowest close since April 9 on fears the ruling coalition could lose its majority, suggesting that there could be a relief rally when trading resumes today. The benchmark index hit an all-time high of 1,718.44 points on April 30, helped by gains in blue-chips amid continued foreign inflows, according to Reuters.
BN's performance, however, was lacklustre, which could limit gains in stocks.
Although the governing coalition extended its half-century rule, it suffered its worst-ever performance, exposing growing racial polarisation in the Southeast Asian nation and potentially undermining Prime Minister Datuk Seri Najib Razak.
The 59-year-old prime minister could now come under pressure from conservatives in his own ruling party for not delivering a stronger majority despite a robust economy and a US$2.6 billion deluge of social handouts to poor families.