Weekly Market Preview (21 June 2010 To 25 June 2010)
From the Chartroom
A replay of our Malaysian bourse performance being stuck in a tight trading pattern is on the cards unless fresh catalysts show up quickly. So please excuse us if we have to recycle contents from our previous writeups for this week.
After swinging inside a 23.1-point range throughout the week, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) settled at its intra-week high of 1,317.69 on Friday, a weekly increase of 23.0-point (+1.8%). Both the FBM 70 Index and the FBM ACE Index also climbed (by 2.1% each) for the week. Trading activity remained slow though, averaging at 545.6m shares in volume and RM854.6m in value (versus the daily average of 575.5m units worth RM774.5m traded the preceding week).
Whether our local stock market will stage a sustained breakout on the chart – either way – anytime soon will likely be triggered by overseas (rather than local) developments. And for the coming week, investors may react to the outcome of the U.S. Federal Open Market Committee (FOMC) meeting scheduled on Tuesday and Wednesday (22-23 Jun).
While the policymakers are expected to keep the federal funds rate close to zero for the time being, their rhetoric on the current economic and monetary affairs could shift the probable timing of future interest rate hikes in the U.S., which has already been pushed back from the second half of 2010 previously to the first two quarters of 2011 following the fallouts from the European sovereign debt crisis. The interest rate differentials outlook may then reshape foreign exchange expectations, which would also be taking into consideration China’s latest initiative to gradually make its Yuan more flexible. Any changes, in turn, will cause wider implications on portfolio funds flows around the world.
Meanwhile, it could still be fairly quiet on the domestic scene this week, notwithstanding possible window dressing activity ahead of mid-year book closing for some funds. Other than a new listing on Wednesday (23 Jun) – Shin Yang Shipping Corporation, a company that provides shipping services and shipbuilding with a market cap size of RM1.26b based on its retail offer price of RM1.05 per share – not much else (in terms of news flows) is in the pipeline.
Technically speaking, a breakout could be on the way if the FBM KLCI either: (i) penetrates above the 1,340 resistance threshold with a follow-up move to challenge the high of 1,349.92 achieved (on 4 May) since the market rally started in Mar last year; or (ii) slices below the resistance line of 1,280, which is approximately where the 200-day moving average line currently stands on.
With no technical signal appearing just yet, it remains to be seen which route the bellwether will take when an eventual breakout occurs. Nevertheless, judging by its resilient performance lately, the chance for a positive breakout is getting increasingly better now. Let’s keep our fingers crossed.
Report is from HWangDBS
A replay of our Malaysian bourse performance being stuck in a tight trading pattern is on the cards unless fresh catalysts show up quickly. So please excuse us if we have to recycle contents from our previous writeups for this week.
After swinging inside a 23.1-point range throughout the week, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) settled at its intra-week high of 1,317.69 on Friday, a weekly increase of 23.0-point (+1.8%). Both the FBM 70 Index and the FBM ACE Index also climbed (by 2.1% each) for the week. Trading activity remained slow though, averaging at 545.6m shares in volume and RM854.6m in value (versus the daily average of 575.5m units worth RM774.5m traded the preceding week).
Whether our local stock market will stage a sustained breakout on the chart – either way – anytime soon will likely be triggered by overseas (rather than local) developments. And for the coming week, investors may react to the outcome of the U.S. Federal Open Market Committee (FOMC) meeting scheduled on Tuesday and Wednesday (22-23 Jun).
While the policymakers are expected to keep the federal funds rate close to zero for the time being, their rhetoric on the current economic and monetary affairs could shift the probable timing of future interest rate hikes in the U.S., which has already been pushed back from the second half of 2010 previously to the first two quarters of 2011 following the fallouts from the European sovereign debt crisis. The interest rate differentials outlook may then reshape foreign exchange expectations, which would also be taking into consideration China’s latest initiative to gradually make its Yuan more flexible. Any changes, in turn, will cause wider implications on portfolio funds flows around the world.
Meanwhile, it could still be fairly quiet on the domestic scene this week, notwithstanding possible window dressing activity ahead of mid-year book closing for some funds. Other than a new listing on Wednesday (23 Jun) – Shin Yang Shipping Corporation, a company that provides shipping services and shipbuilding with a market cap size of RM1.26b based on its retail offer price of RM1.05 per share – not much else (in terms of news flows) is in the pipeline.
Technically speaking, a breakout could be on the way if the FBM KLCI either: (i) penetrates above the 1,340 resistance threshold with a follow-up move to challenge the high of 1,349.92 achieved (on 4 May) since the market rally started in Mar last year; or (ii) slices below the resistance line of 1,280, which is approximately where the 200-day moving average line currently stands on.With no technical signal appearing just yet, it remains to be seen which route the bellwether will take when an eventual breakout occurs. Nevertheless, judging by its resilient performance lately, the chance for a positive breakout is getting increasingly better now. Let’s keep our fingers crossed.
Report is from HWangDBS
