Share prices on Bursa Malaysia rallied very strongly on Monday, March 8 boosted by institutional buying of banking stocks. This extended a rally that has seen the benchmark FBM KLCI rising 40 points in two days, to its highest level in two years.  

The benchmark index’ ability to cross the psychologically important 1,300 point mark also boosted confidence.

The FBM KLCI surged 24.4 points on Monday, closing at 1,324.2. Volume was a brisk at 1.16 billion shares, up from Friday’s 941 million shares. The index’ gains follows Friday’s 15.7 point rise. Gaining stocks beat losing ones by a 3-to-1 margin.

Actively traded stocks include AEM, Transmile, Maybank, Ramunia, JCY and AMMB. Banking stocks made up most of the major gainers, led by Public Bank-local and foreign and CIMB, with PPB, Keck Seng and Bursa being the other notable gainers. The day’s losers were mostly smaller or thinly traded stocks, led by Asia Poly and Resintec.

Gains were also widespread across Asia as sentiment continues to improve, spurred by Friday’s better than expected US jobs report, which sparked a rally on Wall Street. Despite severe winter weather conditions, employers cut a fewer than expected 36,000 jobs in February, and the unemployment rate held steady at 9.7%.

Investor confidence has improved following nearly two months of lackluster global equity market conditions, which saw investors see-sawing between investor optimism and pessimism almost on a daily basis.

Recent US economic data have turned slightly better than expected, especially on the manufacturing front and jobs market. The debt problems in Greece also appear under control as the government has proposed an austerity drive programme to cut the large fiscal deficit.

On the local front, investors will also look forward to the New Economic Model, to be unveiled by the Prime Minister, as well as the annual InvestMalaysia conference.