WEEKLY HIGHLIGHTS
• The FBM KLCI rose to an 8-month intraday high of 1,594.7 points on Monday before closing at 1,579.0 points
to register a loss of 0.3% for the week.
• Regional markets generally closed lower on concerns over slower economic activities in China.
• Looking ahead, the performance of the local and regional markets will depend on improvement in U.S. economic
activities and developments in the Eurozone.

STOCKMARKET COMMENTARY
The FBM KLCI started the week on a strong note as it rose to an 8-month intraday high of 1,594.7 points on Monday. However, profit taking caused the FBM KLCI to ease and close at 1,579.0 points to register a marginal loss of 0.3% for the week. Average daily trading volume decreased to 1.6bil from 1.8bil in the preceding week while daily turnover in value terms eased to RM1.9bil from RM2.0bil over the same period. Regional markets generally closed lower on concerns over slower economic activities in China. The China ‘H’ shares and Hong Kong markets fell by 4.1% and 2.2% respectively for the week. However, the Japan market bucked the trend to rise by 1.3% over the same period on expectations of improved exports following the recent pull-back in the Yen against the U.S. dollar.
On Wall Street, the Dow eased to a 1-month low of 12,734.9 points on Tuesday on caution ahead of the deadline to finalise the debt deal between Greece and its private creditors. However, better-than-expected non-farm jobs data helped the Dow pare down its losses and close at 12,922.0 points, down 0.4% for the week. The broader-based S&P 500 index was 0.1% higher at 1,370.9 points over the week while the Nasdaq edged up by 0.4% to 2,988.3 points over the same period.

In the U.S., the labour market continued to improve as the non-farm jobs added 227,000 jobs in February (above market expectations of 210,000 jobs) compared to 284,000 jobs created in January.
Meanwhile, the unemployment rate held steady at a 3-year low of 8.3% in February. Crude oil prices rose to US$107.4/brl to register a weekly gain of 0.7% following a decrease in U.S. oil inventories. On the regional front, China’s inflation rate eased to a 20-month low of 3.2% in February from 4.5% in January due to lower food prices. The food inflation rate decreased to 6.2% from 10.5% over the same period. On the local front, Malaysia’s export growth decelerated to a 26-month low of 0.4% in January 2012 from 6.1% in December 2011 amid a higher pace of decline in electrical and electronic exports. Meanwhile, import growth eased to a 6- month low of 3.3% from 10.4% over the same period. As imports outpaced exports, Malaysia registered a trade surplus of RM8.8bil in January 2012 compared to RM10.0bil in January 2011. Malaysia’s foreign reserves were maintained at RM426.7bil as at 29th February 2012 on account of sustained capital inflows and positive trade balance. Bank Negara Malaysia kept the overnight policy rate unchanged at 3% during its meeting on 9th March 2012 to support domestic economic activities. On a weekly basis, the Ringgit remained firm to close at RM3.007 against the US$ while on a year-to-date basis, the Ringgit appreciated by 5.3% against the greenback. Looking ahead, the local market is anticipated to move in tandem with overseas markets as investors continue to monitor U.S. economic activities and developments in the Eurozone.
At the FBM KLCI’s closing level of 1,579.0 points on 9th March 2012, the local stock market is trading at a prospective P/E of 15.7x on 2012 earnings, which is lower than its 10-year average P/E ratio of 16.7x. The local market is supported by a gross dividend yield of about 3.5% which exceeds the 12-month fixed deposit rate of 3.15%. Other Markets’ Performance 9 Mar'12 2 Mar'12 % Weekly Dow Jones 12,922 12,978 -0.4 Nasdaq 2,988 2,976 +0.4
TOPIX 849 838 +1.3 SH Comp 2,439 2,461 -0.9 China*, H share 11,256 11,739 -4.1 MSCI China 6,169 6,304 -2.1
Hong Kong 21,086 21,562 -2.2 Taiwan 8,016 8,144 -1.6 South Korea 2,018 2,035 -0.8 Singapore 2,963 2,993 -1.0 Thailand 1,159 1,165 -0.6 Indonesia 3,992 4,005 -0.3
* Hang Seng China Enterprises Index Bursa Securities Market Valuations^
9 Mar'12 2 Mar'12 10 yr av.* FBM KLCI 1,579.00 1,583.78 - PER'12 (x) 15.70 15.81 16.67 Price/NTA(x) 5.29 5.41 2.79 3mth InterBk 3.19% 3.19% 3.12% 12mth FD, % 3.15% 3.15% - *2002-2011 average ^PMB In-House Statistics Malaysia’s Economic Snapshot 2010 2011 2012F GDP growth, % 7.2 5.1 4.5 Inflation, % 1.7 3.2 2.7 F=forecast
Bursa Securities 10 year P/E Ratio (x) Average: 16.7x 9 Mar'12 P/E on 2012 earnings: 15.7x 3


BOND MARKET COMMENTARY
For the fortnight ended 9th March 2012, the U.S. Treasury market weakened on reduced safe haven demand for Treasuries after private creditors agreed to participate in a debt deal for Greece. The 3 and 10-year Treasury yields rose by 1 basis point (bp) and 5 basis points (bps) to 0.44% and 2.03% respectively over the fortnight. However, the 5-year Treasury yield remained unchanged at 0.89% over the same period. The Malaysian Government Securities (MGS) market closed mixed amid a lack of fresh market drivers. The 3-year MGS yield fell by 1 bp to 2.95% over the fortnight while the 5 and 10-year MGS yields rose by 7 bps and 6 bps to 3.22% and 3.48% respectively over the same period. The local corporate bond market was thinly traded with the 3, 5 and 10-year AAA corporate bond yields rising by between 2 bps and 3 bps to 3.63%, 3.88% and 4.27% respectively over the fortnight. In the money market, the spread of the 3- month Kuala Lumpur Interbank Offer Rate (KLIBOR) over the yield of the 3-month U.S. Treasury bill rose to 311 bps from 310 bps over the fortnight ago as the 3-month U.S. Treasury bill fell by 1 bp to 0.08% while the 3-month KLIBOR remained unchanged at 3.19% over the same period. Looking ahead, the U.S. Treasury bond market is expected to remain well-supported in the medium term due to the sluggish outlook for the global economy.
On the domestic front, the MGS market is expected to remain supported amidst uncertainty over the economic growth in the medium-term.