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Tuesday, January 30, 2018

Market Daily Report: Malaysia stocks close lower on profit-taking




KUALA LUMPUR (Jan 30): Malaysia stocks closed lower today, with the benchmark FBM KLCI falling 1.94 points or 0.1% as investors booked profits after recent sharp gains.

The benchmark index flirted briefly in positive territory in the morning session, opening at 1,865.35 points to touch an intra-day high of 1,872.70 points. At 5pm, it pared its early gains to settle at 1,868.58 points.

Market breadth was negative as decliners outpaced gainers by 794 to 252, while 388 counters traded unchanged.

TA Securities Holdings Bhd technical analyst Stephen Soo told theedgemarkets.com that profit-taking has kicked in, after stellar gains in the past few days.

“The index has risen quite sharply in the past few days to its record high in more than three years. The correction is good as the market has been overbought,”  Soo said.

This is in relation to the overnight retreat in Dow Jones and the reversal of the ringgit strength against the greenback, which have encouraged investors to take profits, he added.

“The ringgit went up to 3.85 against the US dollar yesterday — which was the highest since 3.83 in April 2016 — and now we have headed to 3.89. The ringgit has been moving in choppy trade, and has pulled back a little,” Soo added.

At press time, the ringgit was trading at 3.8985 to the US dollar.

Notable decliners across the board were Malaysian Pacific Industries Bhd (MPI) after it turned in weaker quarterly results, glovemakers Top Glove Corp Bhd and Hartalega Holdings Bhd, as well as Hong Leong Financial Group Bhd which had eked out gains following Bank Negara Malaysia’s decision to hike the overnight policy rate.

Sumatech Resources Bhd, UMW Oil & Gas Corp Bhd and Sapura Energy Bhd remained the most actively-traded stocks for a second consecutive day.

Market retreats were seen elsewhere in the region, with Japan’s Nikkei 225 closing down 1.45%, South Korea’s Kospi ending 1.17% lower and Hong Kong Hang Seng Index losing 1.09% at market close.

Reuters reported today that Asian stocks retreated from record highs on Tuesday, after a selloff in Apple shares and spike in bond yields knocked Wall Street lower, while the dollar found support as US bond yields climbed to near four-year highs.

Malaysian markets will be closed tomorrow (Jan 31) and on Thursday (Feb 1), in conjunction with the Thaipusam and Federal Territory Day holidays respectively. Trading resumes on Friday (Feb 2).



Source: The Edge

Monday, January 29, 2018

Market Daily Report: KLCI closes at highest level in over 3 years as blue chips rally




KUALA LUMPUR (Jan 29): The FBM KLCI rose 16.6 points or 0.9% today, the highest level seen since September 2014.

At 5pm, the benchmark index finished at 1,870.52 points, after three billion shares worth RM2.49 billion were traded across the board. The last time the index closed near this level was on Sept 10, 2014, when it ended at 1,870.85 points.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew told theedgemarkets.com that the “unusual" rally in the KLCI today was led by mainly banks and blue chips.

“Investors are buying on expectations that the overnight policy rate (OPR) hike is expected to boost the banks’ interest margins. But there is no reason to be wildly bullish on the banks, the rate hike is actually a make up for lost grounds, instead of creating gains for the banks,” he said.

Pong went on to say that he expects limited beneficial impact on banks, as the rate hike would merely restore instead of lift margins, unless progressive rate hikes are implemented following this, given interbank rates and deposit rates have risen over the past few months, ahead of the 25 basis points (bps) rate hike announced by Bank Negara Malaysia (BNM) on Thursday (Jan 25).

Also, not all bank loans have flexible rates, he said. Citing hire purchase loans which have fixed rates as an example, he said banks will see a margin squeeze in this segment as interest rates for these loans were locked in, while deposit rates go up, leading to higher funding costs, Pong explained.

“Perhaps investors are buying on expectations that there will be several OPR hikes this year, but I think the central bank will take its time with its hike. This round of OPR hike is mainly to correct the OPR drop in July 2016, which led to a huge drop in the ringgit then,” Pong added.

At 5pm, Public Bank Bhd gained 60 sen, Hong Leong Financial Group Bhd and Hong Leong Bank Bhd both gained 46 sen respectively, while Malayan Banking Bhd (Maybank) edged 12 sen higher.
Market breadth, however, was largely negative as losers outstripped gainers on a ratio of 623-to-370 stocks, while 396 counters were flat, mainly dragged by profit-taking activities.

Oil and gas stocks Sumatec Resources Bhd, UMW Oil & Gas Corp Bhd (UMW-OG), and Sapura Energy Bhd dominated Bursa’s most actively-traded list today, though all three closed in the negative territory.

Asian shares elsewhere closed mixed today, with Japan’s Nikkei 225 slipping 0.01%, Hong Kong's Hang Seng Index down 0.56%, while the Korean Kospi rose 0.91% to its all-time closing high, according to Reuters.



Source: The Edge

Friday, January 26, 2018

Market Day Report:KLCI rises 0.44% as banking stocks pick up following OPR hike





KUALA LUMPUR (Jan 26): The FBM KLCI gained 0.44% as buying interest resumed during the second half of trading, with the banking sector picking up following the hike in the overnight policy rate (OPR) announced by the central bank yesterday.

The benchmark index closed 8.06 points or 0.44% higher at 1,853.92.


Hong Leong Investment Bank's head of retail research, Loui Low, said the market is still bullish, supported by foreign investors' interest as well as the gains in banking counters.

"The market is still positive especially with the support from foreign investors, especially in an environment where the ringgit is still strong. The pickup seen in the banking sector is also another catalyst as the OPR hike is expected to be mildly positive for some of the banks," Low said.


He pointed that companies like AirAsia X Bhd saw a lot of trading today as the market is positive of the stronger ringgit, which will be supportive of the airline company.
AirAsia X was the most active counter today with about 249 million shares traded. The stock jumped four sen or 10.1% to 43.5 sen.

Nestle (Malaysia) Bhd led the gainers with an increase of RM4 or 3.7% to RM111.50 while Panasonic Manufacturing Malaysia Bhd led decliners with a fall of 60 sen or 1.7% to RM35.84.
A total of 3.2 billion shares worth RM2.4 billion were traded. Across the board, decliners led gainers at 562 to 380 while 446 counters were traded unchanged.

Elsewhere, the Nikkei share average ended lower in choppy trade as investors locked in profits ahead of the weekend while mining shares and financial firms underperformed the market, said Reuters.



Source: The Edge

Wednesday, January 24, 2018

Market Daily Report: FBM KLCI cuts losses ahead of Bank Negara rate decision



KUALA LUMPUR (Jan 24): The FBM KLCI pared losses to close one point or 0.1% lower today as the ringgit strengthened ahead of Bank Negara Malaysia's interest rate decision tomorrow (Jan 25). Analysts said anticipation of Malaysia's 14th general election (GE14) this year could have also dictated market sentiment.

At 5pm today, the KLCI closed at 1,837.04 points after stooping to its intraday low at 1,834.49 points. The ringgit appreciated to its strongest level against the US dollar today at 3.9118. Over the last one year, the exchange rate was between 3.9118 and 4.4618.

Tomorrow, Bank Negara's monetary policy committee (MPC) is scheduled to decide on the country's overnight policy rate (OPR). Bank Negara's MPC had during its latest meeting on Nov 9, 2017 decided to maintain the OPR at 3%.


Today, GE14 expectation could have led to cautious market sentiment. "There's a general cautious tone in the market today as investors may still be waiting for the announcement of the date for the next GE," Kenanga Investment Bank Bhd analyst Lawrence Yeo told theedgemarkets.com.

Across Bursa Malaysia, 3.36 billion shares worth RM2.43 billion were traded. The top decliner was Petronas Gas Bhd followed by Hartalega Holdings Bhd.

Petronas Gas fell 46 sen to RM17.70 with 294,900 shares traded.




Source: The Edge

Tuesday, January 23, 2018

Market Daily Report: FBM KLCI up at intraday high after US deal to end shutdown




KUALA LUMPUR (Jan 23): The FBM KLCI gained 4.89 points or 0.3% as Asian shares rose to record closing highs after US policy makers reached a deal to end the government shutdown.

At Bursa Malaysia, the KLCI closed at its intraday high of 1,838.04 points. AmInvestment Bank Bhd research analyst Lim Sae Wai told theedgemarkets.com that "market sentiment is still bullish-biased."

Across Asia, Japan's Nikkei 225 rose 1.29% while Hong Kong's Hang Seng climbed 1.66%. Reuters reported that Asian stocks advanced on Tuesday after US senators struck a deal to end a government shutdown in a boost to Wall Street, while the dollar turned higher against the yen after Bank Of Japan's chief reiterated his support for quantitative easing.


It was reported that Japan's Nikkei share average on Tuesday ended at its highest in more than 26 years, with real estate and precision machinery stocks leading the gains. Hong Kong stocks hit another fresh record on Tuesday, aided by continuous inflows of mainland money, and strength in IT and financial stocks.

Across Bursa Malaysia, trading volume was 3.91 billion shares worth RM3.02 billion. Top gainer was British American Tobacco (M) Bhd (BAT) followed by Top Glove Corp Bhd.

BAT rose 78 sen to RM32.78 while Top Glove added 64 sen to RM9.79.



Source: The Edge





Monday, January 22, 2018

Market Daily Report: FBM KLCI gains with Asian shares despite US shutdown





KUALA LUMPUR (Jan 22): The FBM KLCI gained 4.32 points or 0.2% after the index erased losses in tandem with Asian shares. Reuters reported that Asian shares remained resilient despite the pullback in US shares after the the US government was forced to shut down as investors saw limited economic fallout from the standoff in the US capital.

"After all, people know this is just a political show. Neither Republicans nor Democrats can afford to keep dragging their feet for long ahead of mid-term elections this year," Masashi Murata, senior currency strategist at Brown Brothers Harriman was quoted as saying in Tokyo.

At Bursa Malaysia, the KLCI closed at 1,833.15 points at 5pm after falling to its intraday low of 1,825.86 points.

Across Asia, Japan’s Nikkei 225 rose 0.03% while Hong Kong’s Hang Seng climbed 0.43% after both indices erased intraday losses.


In Malaysia, Rakuten Trade Sdn Bhd vice president of research Vincent Lau told theedgemarkets.com that he believed the continuation of the stock market rally "has legs to run" until the country's 14th general election, which must be held by August 2018.

Today, Lau also noted that foreign fund flows into Malaysian shares are still strong although the level seemed to have gradually decreased in recent weeks. "Year-to-date, foreign investors are still net buyers," he said.

Across Bursa Malaysia today, trading volume was 4.62 billion shares worth RM2.87 billion. The most-active stock was Sumatec Resources Bhd which saw some 566 million shares traded. Sumatec shares rose one sen to 11.5 sen.






Source: The Edge

Sunday, January 21, 2018

‘M’sia not cheap, not fast enough’

KUALA LUMPUR: Franklin Templeton Investments, which managed US$753.8 billion (RM2.99 trillion) worth of assets globally as at Dec 31, 2017, is “underweight” on the Malaysian equity market, which it sees as neither cheap enough nor growing fast enough.

“Malaysia has this issue whereby it is never cheap enough to be a significant part of Franklin Templeton’s portfolio, and it is not fast-growing enough in terms of listed companies,” Chetan Sehgal, its managing director and director of global emerging markets and small-cap strategy, told a media briefing yesterday on the asset management company’s 2018 emerging market outlook.

Nevertheless, given the country’s strong gross domestic product growth and exports recorded last year, Franklin Templeton still sees some sweet spots in the equity market here, namely export-related and banking counters.

“The thing is that exporters in Malaysia have done very well despite the fact that the currency has appreciated ... this implies that there is a lot of value addition taking place, which is not easy to be undercut by other players,” said Sehgal.

Banks, meanwhile, could see an acceleration in their earnings growth that reflects the widespread growth of the economy, as they cater to a wide array of industries, he said.

As for financial technology and disruption in the technological space in the region, he said while there has been lots of talk, this has not really translated into an increase in valuation for the local stock market.

For an increase in valuation to happen, he said a new business model needs to come in first, just like how glove makers emerged on the local stock exchange about 15 years ago.

“These glove companies have gone up about 20 times in value [since their initial public offerings]. This is a new business which was not there 15 years ago. We have to allow [this to happen] — to wait for a new business model to come in. We see some of that, but they are still not large enough to make a difference in the overall market,” he added.

On emerging markets, Franklin Templeton expects a more volatile outlook for the equity market in 2018, compared to 2017, with the pace of tightening monetary policy by the US Federal Reserve, economic restructuring in China, as well as the geopolitical tension between the US and North Korea being some of the key factors to look out for.

“We should see a more volatile market in 2018, compared to 2017. We think 2017’s volatility is abnormally low ... however, the big benefit now is that commodity prices in general are higher this year. It’s a big tailwind for emerging markets, which was not the case in [the] previous years. That really will allow emerging markets to do reasonably well, compared to other markets,” Sehgal said.

He noted that the correction for emerging markets that was seen in 2017, of about 4.8%, was the lowest in the last 20 years. This was in stark comparison with the average correction of 18.3% in the past five years, and 24.1% in the past 20 years.

Compared to Malaysia, Franklin Templeton is “overweight” on Indonesia and Thailand.
Nonetheless, Sehgal said the strength of commodity prices will provide the tailwind for the region, and bodes well for Malaysia’s economy and currency.

And despite a strong recovery seen in the ringgit over the last one year, Sehgal thinks it is still “slightly undervalued” based on purchasing power parity valuation.


The ringgit was the best-performing currency in Asia over the last one year, after climbing 12.3% to about 3.96 against the US dollar. It fell 4.3% against the US dollar in 2016, after an 18.5% plunge in 2015.



Source: The Edge Financial Daily

Friday, January 19, 2018

Market Daily Report: FBM KLCI up 7.23 points on Petronas Gas jump; Asian shares rise




KUALA LUMPUR (Jan 19): The FBM KLCI gained 7.23 points or 0.4%, helped by an eleventh-hour spike in Petronas Gas Bhd's share price. Malaysian shares also rose with Asian stock markets.
At Bursa Malaysia, the KLCI closed at its intraday high at 1,828.83 points. Petronas Gas rose 88 sen to RM18.20 to emerge as Bursa Malaysia's fourth-biggest gainer.

Across Bursa Malaysia, 3.83 billion shares worth RM3.19 billion changed hands. Across Asia, Japan’s Nikkei 225 rose 0.19%, Hong Kong’s Hang Seng climbed 0.41% while South Korea’s Kospi increased 0.18%.
 
Reuters reported that Asia stocks shook off losses on Wall Street and edged up to record highs on Friday following China's announcement of faster-than-expected fourth quarter growth, while worries over a possible US government shutdown weighed on the dollar. It was reported that most Southeast Asian stock markets firmed on Friday and were on track to end the week higher as broader Asian shares climbed to an all-time top on data that showed China's growth accelerated in 2017 for the first time in seven years.

In commodity markets, Reuters reported that global oil markets are tightening quickly on falling supply from Venezuela, which posted 2017's biggest unplanned output fall and could see a further decline in 2018, the International Energy Agency (IEA) said on Friday. Debt and infrastructure problems cut Venezuela's December output to 1.61 million barrels per day (bpd), somewhere near a 30-year low. That helped oil prices top US$70 per barrel in early January, their highest level in 3 years.

In Malaysia, Areca Capital Sdn Bhd chief executive officer Danny Wong Teck Meng told theedgemarkets.com that besides China numbers, the US improving economy also supported market sentiment.

“Gains at Wall Street is also mirrored in the Japan equities market. The US has already run up quite a bit — if the global economy grows, Asian markets will be the first to benefit,” said Wong.

It was reported that the US Dow Jones Industrial Average closed above 26,000 points for the first time on Wednesday (Jan 17), just eight trading days after it ended above 25,000 for the first time.



Source: The Edge

Thursday, January 18, 2018

Market Daily Report: FBM KLCI down as Bursa Malaysia small caps dent sentiment



KUALA LUMPUR (Jan 18): The FBM KLCI closed 7.03 points or 0.4% lower as profit-taking across Bursa Malaysia small-cap stocks dented broader market sentiment.

At 5pm, the KLCI closed at 1,821.60 points. The FBM Small Cap Index fell 184.98 points or 1.05% to 17,343.92 points.

"While the local benchmark (KLCI) steadied on buying support in selected heavyweights on Wednesday, profit taking amid heavy settlements from recent active trade on small caps weighed down the broader market. The present profit-taking consolidation process should persist till the recent heavy trade settlements have been absorbed and daily turnover stabilises at more sustainable levels," TA Securities Holdings Bhd wrote in a note today.

Malacca Securities Sdn Bhd senior analyst Kenneth Leong told theedgemarkets.com that although the KLCI opened higher when trading started today, quick profit-taking sent the KLCI lower.

Leong said "profit-taking activities are not just across the KLCI, but also across the broader market."
Across Bursa Malaysia, 4.6 billion shares worth RM3.29 billion were traded. Major decliners included Hengyuan Refining Co Bhd and Petron Malaysia Refining & Marketing Bhd.

Top decliner Hengyuan fell RM1.80 to close at its intraday low of RM12. The stock saw some 12 million shares traded.



Source: The Edge

Wednesday, January 17, 2018

Market Daily Report: FBM KLCI up on 11th-hour spike as Bursa small caps fall




KUALA LUMPUR (Jan 17): The FBM KLCI rose 2.6 points or 0.1% after an 11th-hour spike and as the ringgit strengthened against major currencies.

At 5pm, the KLCI closed at 1,828.63 points after falling to its intraday low at 1,821.54. The KLCI reversed losses as KLCI-linked Hong Leong Bank Bhd and Genting Bhd shares rose among Bursa Malaysia top gainers.

Bursa Malaysia small-capitalisation (small cap) stocks fell. The FBM Small Cap Index fell 150.53 points or 0.85% to close at 17,528.90 points.

Across Bursa Malaysia, 4.97 billion shares valued at RM2.79 billion were traded. Hong Leong Bank was the top gainer while Genting Bhd was the eighth-largest advancer.
 
 AmInvestment Bank Bhd analyst Lim Sae Wai told theedgemarkets.com : “The small-cap index is going through a steeper correction, but its recent peak in early January was pretty overboard, so it is not surprising to see a bit of a pullback. There is a perceived negative sentiment on the weaker dollar towards selected export-oriented companies.”

The ringgit strengthened against the US dollar and Singapore dollar. Compared to the US dollar, the ringgit appreciated to its strongest level today at 3.9435. Over the last one-year, the exchange rate was between 3.9435 and 4.4618.

Against the Singapore dollar today, the ringgit apreciated to its firmest point at 2.9833. Over the last one-year, the exchange rate was between 2.9833 and 3.1786.



 Source: The Edge
 
 

Tuesday, January 16, 2018

Market Daily Report: KLCI erases loss as Asian shares climb to record highs




KUALA LUMPUR (Jan 16): The FBM KLCI rose 0.12 point as Asian shares climbed to record closing highs. Such sentiment could have helped trading volume across Bursa Malaysia to top six billion shares today.

At 5pm, the KLCI closed at 1,826.03 points after falling to its intraday low at 1,818.64 points. Across Asian share markets, Japan's Nikkei 225 rose 1% while Hong Kong's Hang Seng added 1.81%.

Reuters reported that Japan's Nikkei share average rose to its highest level since late 1991 on Tuesday, as a firmer dollar supported exporter stocks and expectations for strong corporate earnings bolstered investor sentiment. Hong Kong's benchmark Hang Seng Index rose to a record closing high on Tuesday, led by index heavyweight Tencent Holdings and Hong Kong Exchanges and Clearing.

In Malaysia, Areca Capital Sdn Bhd chief executive officer Danny Wong Teck Meng told theedgemarkets.com "the (stock market) trend is still positive from the global growth perspective."

“Oil price has breached US$70, and the ringgit has strengthened (past) four against the US dollar, which are good signs for Malaysia,” Wong said.

Across Bursa Malaysia, 6.53 billion shares worth RM3.37 billion changed hands. Top gainers included KLCI-linked Genting Bhd.

Genting Bhd shares rose 15 sen to close at RM9.48 to become Bursa Malaysia's fifth-largest gainer.



Source: The Edge

Monday, January 15, 2018

Market Daily Report: KLCI up on US share gain; ringgit at 3.9525 vs US dollar



KUALA LUMPUR (Jan 15): The FBM KLCI climbed 3.24 points or 0.2% as the ringgit strengthened today and after US shares rose to record closing highs on Friday (Jan 12).

At 5pm today, the KLCI closed at 1,825.91 points. Across Bursa Malaysia, 5.4 billion shares worth RM3.33 billion changed hands.

In currency markets, the ringgit was traded at its strongest level against the US dollar today at 3.9525. Over the last one year, the exchange rate was between 3.9525 and 4.4707.

“(In Malaysia) There is a broader appeal among investors for bigger selection of stocks. It’s a combination of these factors — the upcoming election, a continuation of inflows from foreign funds and a strong ringgit," Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew told theedgemarkets.com.

“There is also the (Malaysia corporate) financial results season coming ahead, with optimism that it would be better than the previous quarter which posted a dismal 4-5% earnings growth," Pong said.
Today, Malaysian and Asian share markets rose after US equities' rise on Friday. US markets were closed today (Monday, Jan 15) for the Martin Luther King, Jr. Day holiday.
  
Reuters reported that Asian shares hit historic highs on Monday after Wall Street extended its record-breaking run, while the US dollar retreat continued as investors priced in the risk of tighter policies elsewhere in the developed world.

It was reported thar Wall Street continued its rally on Friday with record closing highs as the fourth-quarter earnings season kicked off with solid results from banks and robust retail sales drove investor optimism about economic growth. The Dow Jones Industrial Average rose 228.46 points, or 0.89 percent, to 25,803.19, the S&P 500 gained 18.68 points, or 0.67 percent, to 2,786.24 and the Nasdaq Composite added 49.29 points, or 0.68 percent, to 7,261.06.


Source: The Edge

Friday, January 12, 2018

Market Daily Report: FBM KLCI up as ringgit strengthens after oil tops US$70




KUALA LUMPUR (Jan 12): The FBM KLCI closed 5.79 points or 0.3% higher as the ringgit strengthened after crude oil prices topped US$70 a barrel.

At 5pm, the KLCI closed at 1,822.67 points. The ringgit appreciated to its strongest level against the US dollar today at 3.9696. Over the past one year, the ringgit was traded between 3.9696 and 4.4707 against the US dollar.

In crude oil markets, Reuters reported today that Brent marked a December-2014 high the previous day at US$70.05 a barrel.

Today, Hong Leong Investment Bank Bhd head of retail research Loui Low told theedgemarkets.com that investors are still holding Malaysian equities as the ringgit strengthened with crude oil prices. The ringgit tracks crude oil prices as the commodity forms a crucial component of the Malaysian economy.

“There are also election counters (which) are being bought ahead of the (Malaysian) election. That’s why we can see that government-linked company (GLC) counters are moving much faster,” Low said.  He said notable GLCs include Felda Global Ventures Holdings Bhd and Gamuda Bhd.

Across Bursa Malaysia, 3.93 billion shares worth RM3.29 billion were traded. At a glance, O&G-related shares were among the most active stocks across the exchange. UMW Oil & Gas Corp Bhd was the most active stock followed by Sapura Energy Bhd.

UMW Oil & Gas and Sapura Energy saw some 242 million and 195 million shares traded respectively. UMW Oil & Gas shares rose 1.5 sen to 42 sen while Sapura Energy added three sen to 90 sen.



Source: The Edge

Wednesday, January 10, 2018

Market Daily Report: FBM KLCI slips again on profit-taking




KUALA LUMPUR (Jan 10): The FBM KLCI fell 4.03 points or 0.22% as profit-taking drove the index lower for the second consecutive day.

At 5pm, the KLCI closed at 1,822.92 points after rising to its  intraday high at 1,830.63 points. Yesterday, the KLCI dropped 5.2 points to 1,826.95 points.

Today, Areca Capital Sdn Bhd chief executive officer Danny Wong told theedgemarkets.com that profit-taking in the Malaysian stock market "is not that glaring, and is normal considering the local market has been on the uptrend since end-December".

In recent days, the KLCI closed higher at 1,782.70 points on Jan 2 before climbing to 1,832.15 points on Monday (Jan 8).

Across Bursa Malaysia today, 5.75 billion shares valued at RM3.78 billion exchanged hands.
UMW Oil & Gas Corp Bhd was the most-active stock with some 352 million shares traded. UMW Oil & Gas fell 1.5 sen to 41 sen.


Source: The Edge

Tuesday, January 9, 2018

Market Daily Report: FBM KLCI takes breather after four straight days of gains



KUALA LUMPUR (Jan 9): The FBM KLCI closed 5.2 points or 0.3% lower due to profit taking after gaining for four consecutive trading days.

At 5pm today, the KLCI closed at 1,826.95 points. The index erased gains after rising to its intraday high at 1,840.35 points.

“It isn’t a massive sell down. I consider this to be light profit taking. I think the market will come back,” Inter-Pacific Securities Sdn Bhd research head Pong Teng Siew told theedgemarkets.com.
Over the past week, the KLCI closed higher at 1,782.70 points on Jan 2 before climbing to 1,832.15 points yesterday (Jan 8).

Today, Bursa Malaysia saw 6.48 billion shares worth RM4.41 billion traded. Notable decliners included AMMB Holdings Bhd after the stock fell 20 sen to RM4.48 to become the ninth-largest decliner.

Leading gainer was Supermax Corp Bhd after the stock rose 23 sen to RM2.31. Supermax shares rose after Affin Hwang Investment Bank Bhd upgraded its call on Supermax shares to buy from hold.
Affin Hwang analyst Ng Chi Hoong wrote in a note today Affin Hwang also raised its Supermax target price to RM3.10 from RM2.10.



Source: The Edge

Monday, January 8, 2018

Market Daily Report: FBM KLCI up 14.18 points as Bursa volume nears seven billion shares




KUALA LUMPUR (Jan 8): The FBM KLCI rose 14.18 points or 0.8% as volume across Bursa Malaysia neared seven billion shares. Fund managers said Malaysian shares gained from factors including sustained crude oil price gains and positive US market sentiment.

At Bursa Malaysia, the KLCI closed at 1,832.15 points as index-linked oil and gas companies Petronas Gas Bhd and Petronas Dagangan Bhd shares rose among top gainers.

Across Bursa Malaysia, 6.96 billion shares worth RM4.59 billion were traded. Sapura Energy Bhd was the most-active stock followed by UMW Oil & Gas Corp Bhd.

"Sustained crude oil prices is viewed as very positive to Malaysia. (Malaysia's stock) market has run up again following the positive sentiment from the US and moving forward, the positive sentiment will drive the market higher," Areca Capital Sdn Bhd chief executive officer Danny Wong Teck Meng told theedgemarkets.com.

Reuters reported that US West Texas Intermediate crude futures were at US$61.62 a barrel at 0344 GMT, 18 cents, or 0.3 percent, above their last settlement. Brent crude futures were at US$67.77 a barrel, 15 cents, or 0.2 percent, above their last close.

The ringgit strengthened with crude oil prices. Against the Singapore dollar, the ringgit appreciated to 3.0011 at 5pm. The exchange rate today was between between 2.9976 and 3.0110.

Compared to the US dollar, the ringgit was traded at 3.9980 at 5:58pm after trading between 3.9865 and 3.9980 today.


Source: The Edge

Friday, January 5, 2018

Market Daily Report: KLCI gains 14.52 points as election, stronger ringgit drive sentiment



KUALA LUMPUR (Jan 5): The FBM KLCI closed 14.52 points or 0.8% higher as anticipation of Malaysia's 14th general election (GE14) in 2018 and a stronger ringgit drove investors’ sentiment.

At 5pm, the KLCI closed at its intraday high of 1,817.97 points.
In currency markets, the ringgit appreciated to 3.9975 against the US dollar at 5:50pm after trading between 3.9887 and 4.0055 today.

“The (stock market) rally is expected to firm up towards GE14 and people are buying on stronger ringgit," Hong Leong Investment Bank Bhd retail research analyst Loui Low Ley Yee told theedgemarkets.com.

Low said Malaysian shares' "near-term performance depends on corporate results (announcements) in February." He said "if earnings are weak, there might be a (stock market) consolidation.”

Across Bursa Malaysia today, trading volume was 5.84 billion shares worth RM3.94 billion.
Notable gainers included Fraser & Neave Holdings Bhd, UMW Holdings Bhd and Axiata Group Bhd.

Sapura Energy Bhd was the most-actively traded counte with some 332 million shares transacted. Sapura Energy rose 9.5 sen to 81 sen.


Source: The Edge

Wednesday, January 3, 2018

Market Daily Report: FBM KLCI up 10.09 points as Bursa volume tops five billion shares

KUALA LUMPUR (Jan 3): The FBM KLCI rose 10.09 points or 0.6% while trading volume across Bursa Malaysia topped five bllion shares on Malaysia's 14th general election cue.

Such sentiment was apparent as investors bought Malaysian government-linked stocks like Petronas Gas Bhd and Sime Darby Bhd, according to fund managers.

Bloomberg quoted Areca Capital Sdn Bhd CEO Danny Wong Teck Meng as saying "investors are buying into the nation’s government-linked companies ahead of a national election" this year.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew told theedgemarkets.com that Malaysian shares rose "due to the stimulus programme from central banks around the world".

Across Bursa Malaysia today, trading volume was 5.11 billion shares worth RM3.68 billion.

Yesterday, the bourse recorded a trading volume of 3.69 billion shares worth RM2.11 billion.

Today, Bursa Malaysia shares rose 28 sen to RM10.40 to become the seventh-largest gainer across the exchange.



Source: The Edge

Tuesday, January 2, 2018

Factors that swing the market

As we usher in the New Year after the benchmark FBM KLCI closing in the positive zone in 2017  — the first time in three years, many investors would ponder whether the strong momentum could continue into 2018. The following is the list of factors that could possibly swing the market moving forward:

Malaysia’s GE14
The much anticipated 14th general election (GE14) did not materialise in 2017, will definitely take place in 2018 before Aug 24 this year as the mandate of the ruling Barisan National (BN) coalition will end in June 2018. Analysts have in general expects the GE14 to be the main driver of investors’ sentiment in early 2018 before a return to fundamentals post GE14. So far, most research analysts view that the poll is likely to be in between February and April. The pre-election rally is expected to lift sentiments and improve the “feel-good” factor, which is important for incumbent governments.
The election-play counters, companies that are perceived to have a political favour or have the potential to benefit from a good performance at the ballot box by the incumbents such as Utusan Melayu (M) Bhd, George Kent (M) Bhd and Felda Global Ventures Holdings Bhd, to name a few, would draw some interest from traders and investors.
Of course, just as with everything the upcoming GE14 could also pose a downside risk to the equity market as it might act as a short-term dampener on foreign investors who are wary of political risks. Risks to the equity market also include the outcome of the election, especially since most analysts have not priced in the possibility of an unprecedented victory for the opposition. The return of Malaysia’s longest-serving prime minister, Tun Dr Mahathir Mohamad, to active politics, has definitely added a new variable into the equation.
Should the unexpected happen, investors, both local and foreign alike, will most likely have to revisit the drawing board to evaluate the unchartered territory as BN has ruled since independence. This would lead to an immediate knee-jerk reaction to the stock market.

Price stability in crude oil
The positive outlook and price stability in crude oil are viewed as a positive driver for Malaysia’s economy. The government has factored only a US$52 per barrel crude oil price in its Budget 2018’s revenue assumption. Every addition of US$1 per barrel will add up to RM300 million in government’s revenue and narrow the deficit by two basis points, according to TA Securities.
This is positive from a sovereign credit rating perspective, which could also attract foreign investors into both the domestic equity and bond markets in Malaysia.
The oil and gas companies that are listed on Bursa Malaysia will also benefit from a stronger and more stable oil price in 2018 after a disappointing performance in the last three years for most of the companies. With most of the impairments being done in previous years, some of these companies might return on investors’ radar as the oil price continues to make its climb.
Nonetheless, in Petronas’ report on Activity Outlook 2018-2020, it highlighted three key factors that are critical for oil prices to gain strength. The first one is the compliance by Organization of the Petroleum Exporting Countries (Opec) and non-Opec countries on the output cut accord. The response from US tight oil players is also key to price recovery. It added that the ability to reduce breakeven cost from collaboration with service providers, especially deployment of innovative technology, has sustained the level of tight oil drilling activities in the US.
On the demand side, Petronas highlighted that a sustained healthy global demand growth will facilitate oil stock drawdowns and subsequently hasten global oil market rebalancing. TA Securities also pointed out that Saudi Arabia’s resolve to maintain high crude oil prices may weaken post potential listing of Saudi Aramco in the second half of 2018. Furthermore, a possible fix to US shale players’ shortcomings in boosting supply, such as storage of hydraulic fracking crew and equipment, could limit the upside for oil prices.

Stronger ringgit
The ringgit has make its comeback in 2017 and most research houses expect the trend of a firmer ringgit against the US dollar to continue this year. The local currency is viewed to have been oversold given the prolonged losses in 2014 to 2016. The ringgit is undervalued in view of the supportive fundamentals, a more stable oil price, external reserves rebuilding, sustained trade and current account surpluses, progress in fiscal consolidation, receding foreign holding risk in the bond market as well as resumption in the repatriation of export earnings.
Affin Hwang Investment Bank Bhd said in its Malaysia Strategy 2018 Outlook report that typical beneficiaries from a stronger ringgit from an operational perspective includes airlines, auto and media companies on lower operating costs. As for the balance sheet, those with a higher proportion of US dollar-denominated borrowings are also likely to see improvement.
The stronger ringgit would have a negative impact on exporters, such as rubber glove players and semiconductor companies but Affin Hwang noted that the negative currency impact on some of these players would be mitigated by the growth drivers in these sectors.

Monetary tightening and unwinding of QE
The US has started the ball rolling with its rate hike and unwinding of its quantitative easing (QE). In October last year, the US Federal Reserve started to unwind its balance sheet, starting at US$10 billion every month and this will rise by US$10 billion each quarter onwards to a maximum of US$50 billion per month.
The market is expecting another three rounds of rate hikes in 2018. The latest US tax cuts in 2018 that have just recently been passed will also lead to a stronger US dollar and greater inflation. Inflation could rise faster than expected when the higher disposable income from the US$1.4 trillion tax savings over the next decade filters through the economy.
The faster-than-expected tightening in the developed markets could also induce volatility in financial markets due to rapid capital outflows from emerging markets such as Malaysia.
In Malaysia, it is also likely that the central bank will follow suit as expectations of a hike in the overnight policy rate (OPR) has increased on the back of a strong gross domestic product (GDP) growth in the first three quarters of 2017. The prospect of Bank Negara Malaysia raising the OPR will provide a near-term catalyst for the banking sector as banks benefit from an interest rate upcycle as loans are repriced quicker than deposits. Of course, the Malaysian banking sector could see some impact from the implementation of MFRS9 but research houses, such as Affin Hwang, do not foresee any material impact on earnings as asset quality remains healthy.

Corporate earnings expected to grow
Corporate earnings among Bursa-listed companies had been disappointing considering the strong GDP growth in 2017.
Moving forward, as global economy continues to show synchronised expansion, investors will need to see improvement in earnings to be convinced.
According to Maybank Investment Bank (IB) Research’s report on 2018 Outlook & Lookouts, which was published in mid-December last year, global growth momentum is set to be maintained in 2018, expanding at 3.6%, the same pace as in 2017.
Maybank IB Research expects a 5.3% growth in 2018, with domestic demand to continue as growth driver on the back of continued growth in consumer spending, public consumption and gross fixed capital formation on expansions in both private investment and public investment.
Maybank IB Research has a core earnings growth estimate of 7.9% for 2017 and forecast of 9.7% for 2018 as compared to the “no growth” years between 2014 and 2016. Similarly, TA Securities expects earnings growth under its coverage to increase by 6.1% and 7.5% in 2018 and 2019 respectively.

External risks remain
Being an open economy, Malaysia is highly exposed to external risks, such as trade protectionism and economic nasionalism, seen in the US under President Donald Trump.
Trump has repeatedly spoke of his intent to rectify persistent trade imbalances and trade barriers with other countries — with China being on top of that list — any trade war or implication of one among the two largest economies in the world will affect the world, including Malaysia.
The uncertainty revolving Brexit as well as rising geopolitical tension between some of the countries could also impact investors’ sentiment. Among the main concerns involving geopolitical tensions are the ongoing feud between the US and North Korea, Arab Saudi and Iran. A potential war would put synchronised global economy expansion at a halt.



Source: The Edge Financial Daily

Market Daily Report: KLCI falls as investors take profit after last week’s gain



KUALA LUMPUR (Jan 2): The FBM KLCI fell as much as 24.81 points or 1.38% to an intra-day low of 1,772 points today, as investors take profit after the index climbed for three consecutive days last week.

At 5pm, the benchmark index pared some losses and closed at 1,782.70 points, still down 14.11 points or 0.79% from Friday (Dec 29)'s close.

When contacted, Malacca Securities Sdn Bhd senior research analyst Kenneth Leong told theedgemarkets.com that local trading sentiment was also affected by softer Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI) which contracted to 49.9 points in December 2017, as business conditions in the sector broadly stagnated.

“The KLCI was trading in the negative territory throughout the entire trading session today, as it erased most of its previous [week's] gains. Weaknesses were mainly due to soft manufacturing data, coupled with the quick-profit taking, following three consecutive days of gain,” Leong said.

“This week, we might see further profit taking, but it would be mild. But any minor pullback will be healthy for KLCI. Investors may need some time to digest earlier gains,” Leong added.

Nonetheless, market breadth was largely positive today, with 530 gainers versus 490 losers, while 327 counters remained unchanged.

Total trading volume in the open market was 3.7 billion shares, worth some RM2.11 billion.
Notable gainers include Hengyuan Refining Company Bhd and DRB-Hicom Bhd, while KLCC Stapled Group, SP Setia Bhd, Sime Darby Plantation Bhd, Sime Darby Property Bhd and Capitaland Malaysia Mall Trust, which gained substantially on Friday, erased most of their previous gains.

PA Resources Bhd’s warrant-B and its mother shares were the most actively-traded counters today.
In the regional market, Japan’s Nikkei fell 19.04%, while Hong Kong Hang Seng Index gained 1.99%, along with the South Korean Kospi, which advanced 0.49%.

Reuters reported Asian shares scaled a decade peak on Tuesday, after a survey of Chinese manufacturing proved surprisingly upbeat, while the euro lurked within striking distance of its 2017 top against an ailing US dollar.

Reuters said sentiment was also helped by news North Korea had offered an olive branch to South Korea, with Kim Jong Un saying he was “open to dialogue” with Seoul.



Source: The Edge

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