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The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) punched past the 1,300-point mark in morning trade to its highest level in two years with active trade in blue chips.

The benchmark index surged 22.33 points, or 1.72%, to 1,322.11 points at 12.30pm on continued buying interest in blue chips counters and selected lower liners. A total of 689.2 million shares were done. Advancers thumped decliners 501 to 167 while 238 counters were traded unchanged.

Public Bank Bhd-Foreign, which topped the gainers’ list, jumped 66 sen to RM11.94. Public Bank Bhd rose 60 sen to RM11.92 while CIMB Group advanced 40 sen to RM14.12.

Kek Seng (M) Bhd added 49 sen to RM4.71, Maybank put on 13 sen to RM7.53 and Bursa Malaysia Bhd rose 27 sen to RM7.68.

Earlier, Bursa Malaysia issued AE Multi Holdings Bhd with an unusual market activity query on the trading of its shares. AE Multi jumped 13sen to 87 sen on a heavy volume of 30.9 million shares.

The magnitude of the FBM KLCI’s rise is not uncommon among Asian countries. The Hang Seng Index was up 1.92% at 21,186.09, the Straits Times Index rose 35.33 points to 2,825.62 points, the Nikkei 225 increased 190 points to 10,558.96 points and the Jakarta Composite Index advanced 29.50 points to 2,608.28 points.

CIMB Equities Research said if the FBM KLCI could take out the 1,300 psychological level convincingly on stronger volume, then the index could take out the January high of 1,308 level soon.

“The next resistance is at 1,320 to1,324. However, failure to take out the 1,300 level would likely bring in another round of profit taking,” it said, adding that support was seen at 1,282 and 1,266.

“Bulls should also note that this current rally has been on weak volume, suggesting that there is a possibility of a double top pattern forming here,” CIMB said.

“If all goes well, we will see the benchmark FBM KLCI breaking past the psychological mark of 1,300 today, possibly surpassing its previous post-March 2009 recovery high of 1,308.52 (achieved on Jan 21),” according to HwangDBS Vickers Research.

The research house said giving sentiment an initial boost was last Friday’s strong performance on Wall Street.

Major US equity indices jumped between 1.2% and 1.5% at the closing bell on improving economic outlook and rising corporate activity.

“Back home, investors’ mood may be lifted too by the January external trade report released after market hours on Friday, which saw a big jump in exports and imports from a year ago.

“Separately, they will also be interested in a high profile forum – Palm and Lauric Oils conference starting today until Wednesday – where industry experts will talk about their crude palm oil (CPO) price forecasts as well as supply-demand outlook,” HwangDBS said.

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Malaysia’s second-largest mobile phone company Axiata Group Bhd is considering paying a dividend from 2011 as improving business conditions have helped bolster its balance sheet, its chief executive said yesterday.

A likely payout to shareholders would be the first dividend from the company since its listing in 2008 after it was demerged from Telekom Malaysia.

“We have not made any decision … However, given the strength of our balance sheet, especially our cash and debt position, we are in good position to consider it from 2011 onwards,” Axiata chief executive officer Datuk Seri Jamaludin Ibrahim told Reuters in an interview.

Axiata’s 2009 net profit tripled to RM1.66bil, helped by strong performance of its overseas subsidiaries in Indonesia and Bangladesh.

Jamaludin Ibrahim … ‘good position to consider it from 2011 onwards’

The firm, which has a market value of US$9.5bil, turned free cash flow positive for the first time in 2009 and slashed its gross debt to earnings before interest, tax, depreciation and amortisation (EBITDA) ratio to 2.4 times from 4.6 times.

Axiata recorded an EBITDA margin of 42.2% in the quarter ended December, up from 31.7% a year earlier, and compared with 41% recorded by Singapore Telecommunications, South-East Asia’s biggest telecom firm.

“We believe we could maintain the EBITDA margin. Of course the pressure point would come from the competition and also our own investment in mobile broadband.”

Axiata has 120 million mobile subscribers across Asia, up 34% from a year earlier, with a presence in a number of countries including India, Indonesia, Singapore, Bangladesh, Cambodia, and Sri Lanka.

The company has a 86.5% stake in Indonesia’s third largest mobile phone operator XL Axiata, which could become the number two player in the world’s fourth most populous nation, after growing aggressively last year.

XL Axiata has a free float of only 0.2% as Emirates Telecommunications Corp controls another 13.3% stake in the Indonesian firm.

Jamaludin said Axiata would always review the possibility of increasing the free float of its Indonesian unit but declined to comment further on the timeline.

“We have said back at the end of 2008 that we are open at possibility in increasing the float up (to) 15%-20%. It is something that we are always looking at, and right now we also looking at it, perhaps more seriously,” he added.

Axiata share price has gained around 27% since the start of the year, outpacing a 1.1% rise in the broader Kuala Lumpur index.

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Glovemaker Supermax Corp Bhd is proposing a bonus issue on the basis of one bonus share for every four existing shares held in the company.

CIMB Investment Bank Bhd said in an announcement on behalf of Supermax that the proposed bonus issue would entail the issuance of 71.4 million shares of 50 sen each to shareholders on a date to be determined by the board of directors.

It said the rationale behind the bonus issue was to increase the capital base of the company to a level which would better reflect the current scale of operations as well as enable shareholders to have increased equity participation through greater number of shares.

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