Another buoyant week ahead

Analysts tip the Malaysian stock market to continue to run good this week, and could test the resistance level of 1,575 points for the benchmark index.

THE Malaysian stock market is poised to register its third consecutive week of gains, mainly driven by the much anticipated bailout plan for Greece which is expected to boost investors' sentiment.

However, the week may begin with selling pressure driven by the poor performance of the US market last Friday. The Dow Jones Industrial Average fell 89.2 points, or 0.69 per cent, to 12,801; the S&P 500 slid 9.3 points, or 0.69 per cent, to 1,343; while the Nasdaq Composite dropped 23.4 points, or 0.8 per cent, to 2,904.

"While a good set of economic data from the US would help lift the market and sentiment, investors' main attention would be on whether Greece gets a bailout this week," said a head of research from a local brokerage on Friday.

Greece's main political parties agreed on Thursday to a package of austerity measures aimed at cutting down the embattled country's public debt level. The deal was a key demand of the European Union and In-ternational Monetary Fund, both of which had pledged in October to provide Greece with a US$172 billion (RM521 billion) bail-out.

In economics, austerity is a policy of deficit-cutting, lower spending, and a reduction in the amount of benefits and public services provided.

Austerity policies are often used by governments to reduce their deficit spending while sometimes coupled with increases in taxes to pay back creditors to reduce debt.

Greece needs the first tranche of rescue aid by March 20 to avoid a debt default that could hammer European financial markets.

However, eurozone finance ministers meeting in Brussels late Thursday said they would not sign off onthe bailout until this Wednesday, and only under the conditions that Greece's parliament votes for the austerity pac-kage and political leaders of the three main parties agree to it in writing.

Analysts tipped the market to continue to run good this week, and could test the resistance level of 1,575 points for the benchmark index.

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) rose 1.48 per cent to 1,561.66 points last week.

During the week, the market saw the rise of water stocks like Puncak Niaga Holdings Bhd, Kumpulan Perangsang Selangor Bhd, Kumpulan Hartanah Selangor Bhd and JAKS Resources Bhd.

Buying interest was also on penny stocks like Naim Indah Corp Bhd and Green Ocean Corp Bhd.

The week also saw Bursa Ma-laysia issue two Unusual Market Activity (UMA) queries, one on Puncak Niaga, and the other on Compugates Holdings Bhd, for the sharp rise in share price and volume.

This week, several stocks may be on investors' radar - Time Engineering Bhd, Malaysia Building Society Bhd (MBSB), REDtone International Bhd and Notion VTEC Bhd.

A business weekly reported that Khazanah Nasional Bhd is evaluating three bids for its 45 per cent stake in Time Engineering, while a local daily reported that the Employees Provident Fund is considering privatising MBSB.

REDtone, as part of its plan to dispose of non-core business, had disposed of its wholly-owned loss-making unit, REDtone Software Sdn Bhd.

Meanwhile, Notion VTEC, a company which was affected by the floods in Thailand, said that business outlook has turned for the better with a strong recovery in January 2012 sales to much higher than pre-flood level.