KLCI expected to trend lower
By Surin Murugiah
9 Apr 2015
KUALA LUMPUR (April 9): The FBM KLCI is expected to trend lower today despite the higher overnight close at most global markets,
Global equity markets rose on Wednesday and European shares hit eight-year highs on a $70 billion takeover bid by Royal Dutch Shell, while U.S. shares pared gains after the largest U.S. crude inventory build in 14 years slammed oil prices, according to Reuters.
U.S. Energy Information Administration data showed stockpiles of U.S. crude surged nearly 11 million barrels last week in their largest weekly build since March 2001, it said.
AllianceDBS Research in its evening edition Wednesday said that having traded to a high of 1,856.51, the FBM KLCI had on April 8 traded within previous day’s range to form an inside day bar as market participants decided not to stage an immediate follow through buying support.Inside day
It said in the absence of buying interest, the benchmark index was in the red throughout the trading sessions before settling near the day’s low at 1,850.31 (-6.20 , -0.33%).
“In the broader market, gainers outnumbered losers with 427 stocks ending higher and 372 stocks finishing lower. That gave a market breadth of 1.14 indicating the bulls were in control,” it said.
AllianceDBS Research said the inside day indicate a breather in the game play.
The research house said the market pause did not come as a surprise as the benchmark had already chalked up 82 points in the last 16 days [1,856 (7 Apr 2015) minus 1,774 (16 Mar 2015)] or 4.62% gains.
Moreover, it said the benchmark index was fast approaching the immediate hurdle at 1,865.
“This raised certain amount of concerns among the market participants with winning trades and could be observed from the near day’s low settlement at 1,850.31.
“Given the down close, the market is expected to consolidate further in the coming few days in an attempt to balance out the demand & supply forces created in the recent days,” it said.
Indicator wise, the MACD is above the 9-day moving average line, it said.
“The analysis of overall market action on April 8 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,848 level on April 9,” said AllianceDBS Research.
-----------------------------------------------------------------------------------MIDF reiterates CI year-end target of 1,900 points
8 Apr 2015
MIDF Amanah Investment Bank has reiterated its FTSE Bursa Malaysia KLCI (FBM KLCI) year-end target of 1,900 points, on the back of stable commodity prices and the ringgit.
In a research note today, MIDF said earnings sentiment for the plantation and, oil and gas companies, the direct casualties of slumping commodities price, was expected to improve.
"This optimism is also based on the still healthy domestic demand, as well as, improving external conditions.
"The external tailwinds could also mean better outlook for the ringgit while the local equity market might benefit from positive flow of foreign funds," it said.
From March to August last year, crude palm oil prices fell 22 per cent to RM2,100 per metric tonne while crude oil slumped 55 per cent from July to January to US$50 per barrel.
Meanwhile, MIDF in another research note, said the ringgit strengthened against the US dollar backed by foreign buying in selected bluechips.
"Inflow of funds, building up over the past three weeks, lifted the FBM KLCI to its highest level since November last year and pushed the ringgit to a one-month high against the greenback," it said.