11/06/2013 (The Star) - Malaysian blue chips have staged a rally, led by plantation heavyweights, pushing the FTSE Bursa Malaysia KL Composite Index up 12.21 points to 1,787.80, just a hair's breadth away from its record close of 1,788.43 points on May 14.

Data released by the Malaysian Palm Oil Board showed that palm oil stocks dropped 5.12% or 97,983 tonnes to 1.82 million tonnes in May month-on-month.

Besides that, newswires reported that exports of Malaysian palm oil products rose 10.3% to 419,035 tonnes between June 1 and 10 from 380,047 tonnes compared to the same period in May.

IOI Corp Bhd rose 3.39% or 18 sen to RM5.49, PPB Group Bhd was up 2.18% or 30 sen to RM14.04, Kuala Lumpur Kepong Bhd added 1.4% or 30 sen to RM21.74 while Sime Darby Bhd gained 1.26% or 12 sen to RM9.61. Genting Plantation Bhd, despite not being a component of the 30-stock benchmark, was also among the top gainers, jumping 44 sen to RM9.80.

Two other top gainers were Country View Bhd and Cahya Mata Sarawak Bhd, which leaped 68 sen to RM2.97 and 60 sen to RM6.10, respectively.

Gainers outpaced losers by 667 to 224, while 233 counters remained unchanged. There were 2.42 billion shares changing hands with a turnover value of RM2.53bil.

The rally seen in the local bourse was also in line with regional markets, as most of them rebounded on solid US jobs data which offset the concern about the near-term tapering of the Federal Reserve's monetary stimulus.

Aberdeen Asset Management Sdn Bhd managing director Gerald Ambrose told StarBiz: “Bad economic news is good news for the market on expectation that the Fed would continue to pump money into the market should the economic outlook remain bleak. On the other hand, quantitative easing measures would be cut back should the economy improve.”

He said that the world economy was getting “nervous”, as investors got excited over “little” news such as the latest US job data.

“The confidence in risk equities is wobbling a bit. Foreign funds generally consider Asean markets, including Malaysia, as risk equities. So, as their risk appetites reduce, they are pulling out their money,” he said, adding that they had switched to investing in the greenback.

“Some of the foreign mutual funds that invest across the emerging markets are selling transversely,” he added.

He also said the effect had been amplified by hedge funds, especially those which had invested aggressively in emerging markets on borrowings.

Meanwhile, Philip Capital Management Sdn Bhd chief investment officer Ang Kok Heng said the amount sold off by foreign funds was not substantial compared to what they had bought over the last one to two years. “The quantity they are selling off at this point is not alarming,” he said.