Trump’s Win – Bark Worse Than Bite?

While Asian equity markets may remain soft after the surprise of Donald Trump’s win in the US presidential election, we look forward to buying opportunities. Essentially, we do not expect significant economic repercussions on Malaysia’s economy or corporate earnings, save for the indirect impact on downward biases for the ringgit vs the US dollar and on interest rates. We highlight the trough prices of our conviction picks, as well as some buying opportunities.

Near-term confidence pricked. Asian equity markets have swooned on knee-jerk reactions to Trump’s surprise win; the FBMKLCI eased 1%. Despite the major turnaround in US equities after Trump’s acceptance speech which promoted national unity and stressed on fiscal stimulus (the DJI futures initially fell by as much as 800 pts before the cash DJI remarkably recovered to positive territory), investment sentiment in Asia may remain damp and to be swayed by Trump’s anti-globalisation rhetoric. Nevertheless, we do not …

FBM KLCI Technical Outlook

Stocks on Bursa Malaysia snapped a three-day losing streak to end higher last Friday on bargain hunting in selected heavyweights, which saw late fund buying of Tanaga Nasional and Malayan Banking. Bargain hunting by institutional funds supported the local market but further gains were limited by fears of a better-than-expected US third-quarter gross domestic product data which will be out later of the day. Asian stock markets were mixed as they were still affected by a flurry of major corporate earnings reports across the region and the declining oil prices. The ringgit weakened further against the US dollar at 4.1970/1020 from the 4.1810/1900 recorded on Thursday, tracking the performance of emerging Asian currencies. At close, the FBM KLCI settled at 1,670.27, up 1.24 points or 0.07%, from Thursday’s close of 1,669.03, after opening 0.58 of a point higher at 1,669.61 and moved between 1,666.97 and 1,671.72 throughout the day. On a weekly basis, the benchmark index gained 0.29 of a p…

Bursa Malaysia - All Eyes On Budget 2017

Market review Last Friday, the MSCI Asia Pacific Index (MXAP) inched up 0.24-pt to 138.16 (wow -1.73%) after recorded a 5th straight decline following a higher-than-expected China CPI, signaled surprising economic strength in the world's second largest economy. However, sentiment remained cautious ahead of the Janet Yellen's speech at the Boston Fed Conference on how close the Fed is towards a second rate hike in December. Tracking profit taking on crude oil, China’s sluggish trade data and Singapore’s weakest GDP growth (since 2009), there were sparking fears of potential negative implications for Malaysia’s 2H16 economic outlook. KLCI lost 6.1 pts to 1659 and recorded a weekly decline of 6.4 pts. Sparked by better-than-expected banks earnings and retail sales, the Dow rallied as much as 160 pts in the early session. However, profit taking reduced the gains to only 39 pts as investors brace for the key upcoming results this week, which include Intel, Microsoft, GE, Johnson &…

Bursa Malaysia - Caution With Focus on OPEC Meeting

Stocks fell on Tuesday, with most investors sidelined amid lack of local leads and attention focused on the first direct US Presidential debate. The KLCI slipped 4.78 points to end at 1,664.72, after ranging between high of 1,666.69 and low of 1,661.58, as losers beat gainers 426 to 338 on slower turnover of 1.48bn shares worth RM1.85bn.

Support at 1,655/1,648, Resistance at 1,678 Local market sentiment should remain cautious today, with investors to focus on the meeting of OPEC producers for leads. Immediate support for the index will be at the 100-day ma at 1,655, next at 1,648, the 3 Aug low, and recent low of 1,645, with stronger support seen at 1,616, the 50% retracement of the 1,503 low of August last year to the April high of 1,729. Immediate resistance is at 1,678, the 30-day moving average, with tougher resistance seen at the 1,700 psychological level and subsequently 1,729.

Buy on Weakness IHH & RHB Bank
Any further correction on IHH shares towards the 61.8%FR (…

FBM Small Cap Index - Bulls Are Under Bearish Pressure

The current market is weak as the bears are still in charge. Last Friday, the FBMSC rebounded by 61.86 pts to settle at 15,169.40 pts. It formed a white candle that pierced more than half of the prior black candle’s body. This usually signals that the positive momentum is revving up. Nevertheless, until we witness a solid bullish follow-through, we think that the index is merely taking a breather. This is a normal reaction, especially after the series of weak performances that breached firmly below the 50-day, 100-day and 200-day SMA lines in the last two weeks. Overall, our near-term negative outlook remains intact.

Currently, we see that that the FBSMC is situated at its lowest level since July. In the absence of a solid positive development, this indicates that the bears are still in dominance over the bulls. This is also supported by the fact that the 14-day RSI Indicator is below the 50-pt neutral level, which points towards a weak outlook.

We keep the immediate support a…

Bursa Malaysia Shares: Stimulus Hopes and Oil Price to Underpin Sentiment

Bursa Malaysia shares managed to rebound from early decline in choppy trade Thursday, in line with most of the regional markets as weak trade data from Japan weighed on sentiment. The index inched up by 0.55 points to close at the day’s high of 1,694.87, off an early low of 1,690.44, as losers beat gainers 439 to 384 on turnover totaling 2.85bn shares worth RM1.99bn.
Support from Rising 10-day ma (1,682)
Hopes for further stimulus from Japan which reported weak trade data and oil output freeze from major producers which pushed WTI crude up to USD48.22 a barrel overnight should underpin local trading sentiment. Immediate support for the index remains at the rising 10-day moving average at 1,682, next will be the 100 and 200-day ma at 1,665, followed by the 50-day ma at 1,655. Immediate resistance stays at Tuesday’s high matching the 1,700 psychological level, with tougher resistance from the April peak of 1,729.
Take Profit on AMMB & CIMB
Weakening trend indicators on AMMB impli…

FBM KLCI - Strong Ringgit to Boost Sentiment

Blue chips led by banks again extended gains Wednesday, after the ringgit appreciated to a near eight-month high of 3.91 to the USD, the strongest since early Aug last year, copying regional strength after the US Fed chief suggested interest rates may not be raised soon. The KLCI added 2.78 points to end at 1,717.82, off an early high of 1,724.13 and low of 1,716.37, as gainers edged losers 433 to 351 on improved total turnover of 1.85bn shares worth RM2.34bn.

Resistance at 1,728, Support at 1,692
Given the recent strong ringgit trend, companies with high foreign borrowings may recover further from their severe selloffs while major exporters experience profit-taking corrections. Significant resistance for the index stays at 1,728, the 61.8%FR of the 1,867 to 1,503 selloff matching the October 2015 peak, with subsequent stronger hurdles from the August 2015 high of 1,744 and the 76.4%FR level at 1,781. Immediate support stays at the rising 30-day moving average (1,692) and then the 2…