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Market Pulse
Daily updates brought to you by Malacca Securities. 

FMB KLCI - DAILY - 15/8/2018



Mild Rebound In Store 

• The FBM KLCI (+0.02%) managed eke out minor gains after enduring a choppy trading session yesterday to rebound from previous session heavy selloff. The lower liners – FBM Small Cap (+0.8%), FBM Fledgling (+0.7%) and FBM ACE (+1.3%) all recovered most of their previous session losses, while the broader market closed mixed.

• Market breadth turned positive as advancers outnumbered decliners on a ratio of 520-to-374 stocks. The positive market sentiment also lifted traded volumes by 11.8% with 2.32 bln shares exchanging hands. 

• Half of the key index components advanced, led by KLK (+18.0 sen), followed by Maxis (+13.0 sen), Hartalega (+10.0 sen), Tenaga (+10.0 sen) and Axiata (+5.0 sen). Amongst the biggest advancers on the broader market were Vitrox (+32.0 sen), Dufu (+22.0 sen), Apex Healthcare (+20.0 sen) and Y.S.P. Southeast Asia (+19.0 sen). Guan Chong added 8.0 sen after posted a record high quarterly net profit. 

• On the flipside, notable decliners on the broader market include Ayer Holdings (-30.0 sen), Chin Teck Plantations (-22.0 sen), MPI (-160.0 sen), MISC (-15.0 sen) and Carlsberg (-10.0 sen). Key losers on the local bourse were Nestle (-60.0 sen), Petronas Dagangan (-42.0 sen), MISC (-15.0 sen), KLCC (-11.0 sen) and Petronas Gas (-10.0 sen).

• Asia benchmark indices ended mixed yesterday as the Nikkei (+2.3%) re-claimed the 22,000 psychological level, snapping a four-day losing streak as the rally in Japanese Yen against the Greenback took a breather. The Shanghai Composite fell 0.2%, dragged down by the weaker-than-expected Industrial Production data in July 2018 that grew 6.0% Y.o.Y – lower than consensus estimates at 6.3% Y.o.Y growth. The Hang Seng Index (-0.7%) extended its losses, pressured by weakness in technology shares. ASEAN stockmarkets, meanwhile, closed mixed yesterday. 

• U.S. stockmarkets rebounded from their longest slide since March 2018 after the rout in Turkey assets abated. The Dow gained overnight as the Dow rose 0.5% overnight. On the broader market, the S&P 500 (+0.6%) recovered all its previous session losses with all eleven major sectors advanced, while the Nasday finished 0.7% higher.

• Earlier, European equities closed mostly lower as the FTSE fell 0.4%, despite unemployment rate in July 2018 fell to 4.0% - the lowest level since February 1975, while the CAC edged 0.2% lower after erasing all its intraday gains. The DAX closed on a flat note after enduring a volatile trading session.

THE DAY AHEAD

• After managing to eke-out some minor gains yesterday, we think the recovery could persist over the near term as the Turkish currency crisis eases. This could provide some measure of calmness to Emerging Market stocks and put a stop to the recent steep selloffs, although the concerns are far from over as the U.S. continues to exert political pressure on Turkey.

• While we think there will be continued recovery, the upsides may be limited due to the still cautious undertone. At the same time, the market is also still toppish thus, leaving little room for significant gains, in our view. On the upside, the FBM KLCI’s resistances are at 1,790 and 1,800, while the supports are placed at 1,780 and 1,770 respectively.

• The broader market shares also made a comeback yesterday and should continue to make gains over the near term on the back of the mild reprieve from the global geopolitical issues. 



 

The Market Pulse is a proprietary report courtesy of Malacca Securities Sdn Bhd (a participating organisation of Bursa Malaysia Securities Berhad) and has been abbreviated by Focus Malaysia. The report is for information purposes only and is not a recommendation to buy or sell any securities or financial instruments.

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