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TRADING volume on Bursa Malaysia fell to its lowest in more than a year at 215.8 million shares yesterday on selling of blue chips and the lack of much-needed corporate news to boost the market.

Analysts were surprised by the sharp decline in volume, the lowest since October last year, but expected volume to pick up, as seasonally December, January and February were better months.

"Today's trading volume is pathetic. It is unusually low and this is not the eve of a holiday," said TA Securities head of research Ngu Chie Kean. He said that for last week, volume was low because of the holidays and fund managers and clients were out of town.

A n Securities research head Desmond Ch'ng said the reduction in volume had started with the holiday season and now there was just a lack of catalysts to move the market.

Ch'ng attributed the low volume to a combination of factors resulting in investors becoming cautious ahead of the current results season.

Yesterday, the Kuala Lumpur Composite Index closed 2.43 points lower at 909.1, while the Emas Index lost 0.85 point to 206.95 and the Second Board Index shed 0.02 point to 84.12. Declining counters beat advancers 427 to 206 with 307 counters unchanged.

Resorts World Bhd was the top loser, closing 40 sen down at RM10.90 with 1.25 million shares done. Southern Bank Bhd fell 16 sen to RM3.94, while its warrants WA dropped 14 sen to RM2.20 and W1 (foreign) 16 sen to RM2.08. Killinghall (Malaysia) Bhd and its loan stocks lost 14 sen each to RM3.18 and RM1.85 respectively.

Tenaga Nasional Bhd fell 15 sen to RM9.85 while IOI Corp Bhd and MISC Bhd-foreign both ended 20 sen lower to RM13.40 and RM9.80 respectively. Hong Leong Bank Bhd, which made a marginally higher net profit of RM142.13 million for the first quarter, fell 15 sen to RM5.15.

On the outlook for the market, TA Securities' Ngu said he would be concerned if the thin volume continues over the next few days.

"In terms of earnings, we don't expect it to be a major driver based on most of the results recently. Furthermore, there is not enough news to generate excitement in the market," he said, adding that TA Securities' official target for the KLCI was 970 by year-end.
Another research head said investors were staying on the sidelines on concerns that the KLCI could fall below the psychological support level of 900, which was only nine points away.

However, he said the stock market fundamentals were still strong despite the weak sentiment, adding that a decline below 900 will provide an opportunity for bargain hunting.

On the impact of stockbroking companies' bottom line, he added that it was still too early to forecast whether the thin trading would continue as some institutional players were still on holiday due to the school break. He expected trading to pick up next week.

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