Bursa Malaysia: Liquidate On Rally by MIB

A very jerky and stilted rebound to sell into

    FBM KLCI: Key Points

    • KIANJOO – May surge further

    • FBM KLCI – A stilted rebound to sell into

    • Obvious supports are at 1,500 & 1,523

    • 1,526 & 1,544 resistance levels will cap

     

    Market Review The FBM KLCI rose 8.29 points to 1,525.85 yesterday, as bargain-hunting activities lifted the index from the morning’s low. The FBM 100 also gained by 32.84 points and the FBM EMAS added 24.41 points. Market breadth was again quite negative, as he gainer-to-loser ratio was 259 to 639 while 238 counters were unchanged. Market volume traded was 1.84b shares - valued at RM2.06b.

     

    Daily Technical Outlook The FBM KLCI rebounded strongly by gaining 8.29 points to 1,525.85 yesterday. Its resistance areas of 1,526 and 1,544 will cap market gains, whilst the obvious support areas are located at 1,500 and 1,523. The FBM KLCI has temporarily stalled at its new all-time high of 1,576.95 on 6 January 2011. Since then, the index has moved into a new 2011 low of 1,490.44 recently. We anticipate the index to remain volatile in the short term and bearish in the medium term. As a result, very short-term trading is the key to the markets.


    We suggest clients liquidate on rallies and remain more in cash (or in price defensive counters). Heavy foreign selling in the Asia-Pacific region and in Malaysia could be the next obvious major investment move on any significant regional rebound. Due to the lower European markets last night; we may see the FBM KLCI in a stilted and stunted rebound posture today. Some stocks to sell on rallies and avoid are: AMMB, BORNOIL, GUANCHG, HWGB, IOICORP, MEGB, MISC, OLYMPIA, PBBANK, TANCO and UNISEM, Uptrend stocks we like are: ANNJOO, BPPLAS, CBIP, COASTAL, FIMACOR, KEN, KFC, KIANJOO, KWANTAS, MFLOUR, MITRA, NAGAMAS, PCHEM, SCIENTX, SEG, TENAGA and TWS.

     

    by Maybank Investment Bank

    Popular posts from this blog

    Malaysia Inflation to start easing end-3Q or early 4Q2011

    Image
    Malaysia Inflation Rose To The Fastest Pace.
    Inflation is still a major concern and we expect the upward pressure to stay in 3Q2011 coming from food & non-alcoholic and clothing/footwear in  view of the festive seasons.     Impact from June’s electricity tariff hike is expected to continue. But the  upward inflation pressure can be contained from stronger RM/USD and high base comparison. Nonetheless, we expect inflation to start easing by end 3Q2011 or early 4Q2011. Meanwhile, with global uncertainties flared by euro debt crisis and slower US economic recovery lingering, it has forced AxJ policymakers to focus on growth as opposed to inflation. Rates hikes could be reaching its tail end. We expect BNM to accommodate further erosion in real returns by holding OPR at 3.00% to focus on growth. But possibilities for another 25bps hike in OPR remains, as it depends on inflation outlook. Likewise SRR hike will depend on liquidity inflow. If that happen, we expect another 50bps to 100bp…
    Read more

    Trump’s Win – Bark Worse Than Bite?

    Image
    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.

    WHAT’S NEW
    • 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 …
    Read more

    FBM KLCI Technical Outlook

    Image
    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…
    Read more