Thursday, January 04, 2007

Gap to narrow soon

Our stock market is now abuzz with positive expectancy. The increasing demand for our oil palm has push prices up. The strengthen ringgit and foreign funds inflow have generated great demand for our blue chip counters. Bank Niagara’s move to allow banks to invest more in equities will also increase the demand for shares. The KLCI at 1117 is only a short distance from its all time high of 1332.

Although the primary trend of the KLCI has been trending up since June 2001, many people are still in the red as regards to their activities in shares. These are the people who have confused the value of a share with its price. A low-price share stock may actually be very costly while a high-price stock may actually be very cheap. Know what is what before you buy.

Our second and third liners have not moved yet. The big gap between them and the blue chips is likely to be narrowed in the near future. I believe my prediction will turn out to be correct.

Good luck