Published: Monday March 25, 2013 MYT 5:40:00 PM

Cyprus resolution sparks equities rally, KLCI surges 17pts

By Joseph Chin

KUALA LUMPUR: European and Asian equities markets rallied on Monday, with Malaysia's FBM KLCI having one of the best days in recent weeks, after Cyprus clinched a last-ditch deal to prevent a collapse of its banking system.

At 5pm, the FBM KLCI was up 17 points or 1.04% to 1,643.89, the highest since March 14. Turnover was 708.60 million shares valued at RM1.46bil. There were 304 gainers, 309 losers and 312 stocks unchanged.

Reuters reported European shares rebounded and safe-haven German government bonds fell early on Monday after Cyprus clinched a last-ditch deal with lenders to bail out the debt-ridden island and avert a collapse of its banking system.

Cypriot policy-makers agreed to a deal with the European Union, the European Central Bank and the International Monetary Fund to shut down its second largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a 10bil euro (US$13bil) bailout.

At Bursa Malaysia, blue chips rose in line with the key Asian markets on the positive news.

Another positive factor was JP Morgan Malaysia Research's move to advise investors to buy quality growth stocks now including AMMB, Axiata, Berjaya Sports Toto, CIMB, Dialog, Gamuda, IJM Land, KLCC and Media Prima.

MIDF Equities Research said on a net basis, foreign investors bought RM192.20mil of Malaysian equities from the open market in the week ended March 22. BAT was the top gainer, rising RM2.02 to RM62 and pushing up the KLCI 1.04 points. Carlsberg added 24 sen to RM13.94.

Banks were among the top performers, with CIMB up 13 sen to RM7.29 and adding 2.23 points to the KLCI, Maybank gained nine sen to RM9.23 and Public Bank eight sen to RM16.02 while Hong Leong Bank rose four sen to RM14.42 and AMMB two sen to RM6.40.

Among the telcos, Axiata added nine sen to RM6.45 and DiGi 11 sen to RM4.53. UMW advanced 26 sen to RM13.08 and Genting Bhd 17 sen to RM9.63.

Crude palm oil for third-month futures fell RM16 to RM2,477. PPB Group rose 32 sen to RM12.52, TAHPS and TDM 20 sen each to RM5.20 and RM3.72 while heavyweight IOI Corp six sen to RM4.66.

Among the key regional markets, Japan's Nikkei 225 jumped 1.69% to 12,546.46; Hong Kong's Hang Seng Index 0.61% higher at 22,251.15, Taiwan's Taiex 0.77% higher at 7,856.12; South Korea's Kospi gained 1.49% to 1,977.67 and Singapore's Straits Times Index advanced 0.35% to 3,269.87.

However, Shanghai's Composite Index fell 0.07% to 2,326.71.

The ringgit strengthened to 3.0989 from 3.1121, the best since March 1.

US light crude oil rose 40 cents to US$94.11 and Brent 57 cents higher at US$108.23. Spot gold fell US$2.80 to US$1,605.75.

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