FBM KLCI on our Malaysian bourse to move sideways

Even though Wall Street extended its gains last night – its key equity indices rose between 0.9% and 1.3% on better economic data – we suspect Asian investors would be keeping an eye on the U.S. stock futures performance for market direction today.

This morning, the Dow Jones Industrial Average Sep futures contract lost ground (partly due to news that the CEO of Apple has resigned) to hover at a 73-point discount to the spot rate. We expect the benchmark FBM KLCI on our Malaysian bourse to move sideways with a marginal positive bias ahead after declining by 13.2-point yesterday.

In terms of corporate developments, among the listed companies that reported below expectations financial results last evening were Kinsteel, Kossan Rubber and LM Cement. More earnings announcements are due to be made later today, including from Maxis (during lunch hours), Sime Darby and Genting/Genting Malaysia. Separately, EPIC could be in the limelight after getting an unconditional takeover offer to buy its shares at RM3.10 each, which will also involve a cash compensation scheme to the shareholders who have sold their EPIC shares between 10 Dec 2010 and 23 Aug 2011.

Wall Street jumped last night

Wall Street jumped last night. Key U.S. equity indices rose between 3.0% and 4.3% chiefly on the expectations that the Federal Reserve chairman could be announcing fresh policy responses to stimulate the struggling U.S. economy at a gathering of central bankers later this week.

This may provide a temporary boost to investment sentiment around the region today. On the chart, the benchmark FBM KLCI will probably climb towards its technical resistance level of 1,495 ahead. Meanwhile, among the slew of corporate financial result announcements out yesterday evening, banking heavyweight CIMB’s report card came in within expectations (which may lead to a rebound in its share price after dropping 4.4% in three days) while Axiata and MAS posted disappointing earnings.

FBM KLCI may swing sideways with a downward bias ahead

After rising as much as 1.9%-2.4% initially, major U.S. equity indices lost steam subsequently to finish between flat and marginally up (0.3%) last night. This pedestrian Wall Street performance would likely prompt Asian investors to be cautious today.

Sentiment on our Malaysian bourse could be affected too. The benchmark FBM KLCI may swing sideways with a downward bias ahead. Immediate support level is seen at 1,465. Against the sluggish broad market backdrop, investors are expected to react to individual corporate developments such as:

1. Sunway as its shares will be re-quoted today following the merger exercise between Sunway Holdings and Sunway City;
2. KNM, after reporting below consensus earnings in 2Q11; and
3. Axiata, which is due to announce its latest quarterly results during lunch time.

Meanwhile, more financial announcements – from the likes of CIMB, MAS, AirAsia and Parkson – are scheduled to be made after market hours today.

Selling pressures across Asia when trading resumes this week

Brace for more selling pressures across Asia when trading resumes this week. Essentially, the bears would remain in control following an extended drop on Wall Street last Friday. Key U.S. equity indices fell between 1.5% and 1.6% at the closing bell as investors sold equities in response to deteriorating economic prospects.

Back home, the benchmark FBM KLCI will likely start the week on a weaker footing, possible sliding towards the immediate support level of 1,465 ahead. Among the index heavyweights that could drag down the broad market today include Tenaga (after it issued a profit warning arising from additional high fuel costs) and Maybank (which is due to release its latest quarterly results during lunch hours today).

Report from HWangDBS

The bears are back, causing Wall Street to tumble again last night

The bears are back, causing Wall Street to tumble again last night. Key U.S. equity indices slumped between 3.7% and 5.2% at the closing bell on mounting concerns that the global economic recovery would stall while European banks could face capital constraints.

The negative vibes will surely be felt across the region today. Back home, we expect the benchmark FBM KLCI to slip below its immediate support level of 1,495, possibly falling towards the next support mark of 1,465. In terms of corporate development, we may see interest from investors in: (a) Dialog Group, which has proposed a rights issue with warrants (on the basis of 2 rights shares and 1 warrant for every 10 shares held); and (b) Petra Energy, following a media
report saying that its parent Perdana Petroleum is looking to sell its 29.6% stake in the company.

It is going to be a slow trading day on our Malaysian stock exchange today

It is going to be a slow trading day on our Malaysian stock exchange today, much like yesterday (which saw fewer than 900m shares changing hands) as a dearth of fresh market leads is expected to keep most investors on the sideline. On Wall Street last night, key U.S. equity indices ended between flat and marginally weaker (-0.5%).

Similarly, the FBM KLCI will likely show a flat performance ahead to reflect the sluggish investors’ mood. The benchmark index could be moving sideways inside a narrow trading range with its immediate support level seen at 1,495.

Against a broadly quiet market backdrop, Esso Malaysia shares will come under the limelight following the sale of a 65% controlling stake to San Miguel Corporation, which will also be required to extend a mandatory takeover offer at RM3.50 per Esso Malaysia share (versus its last traded price of RM4.95). Separately, MISC is scheduled to announce its latest quarterly results in the evening.

Report from HWangDBS

Rollercoaster ride for Wall Street continues

And the rollercoaster ride for Wall Street continues. Extending their recent volatile swings, key U.S. equity indices jumped between 3.9% and 4.7% last night following news of a drop in jobless claims.

The positive overnight lead should calm investors around the region today. Back home, the benchmark FBM KLCI could stage a technical rebound but may struggle to cross the immediate resistance level of 1,495 ahead. In terms of news flows, Prime Minister Najib Razak is scheduled to make an investment announcement in East Coast this morning while on the corporate front, Alam Maritim has secured oil & gas services contracts worth RM20m and Catcha Media has served up a negative surprise after amending its strategic alliance agreement with Microsoft to less favorable terms. Later in the evening, Genting Singapore (a subsidiary of Malaysia-listed Genting Bhd) is due to release its latest quarterly earnings.