Market Pulse
Daily updates brought to you by Malacca Securities. 

FMB KLCI - DAILY - 21/8/2018

Still Riding On Mild Upsides 

• The FBM KLCI (+0.2%) started off the week on a strong footing as the key index extended its gains after lingering mostly in the positive territory yesterday. The lower liners, however, ended mostly lower as the FBM Small Cap and FBM Fledgling fell 0.02% and 0.1% respectively. Nevertheless, the broader market ended mostly positive, anchored by the REITS sector (+0.6%).

• Market breadth turned negative as advancers overpowered decliners on a ratio of 497-to-383 stocks. Traded volumes, however, rose 14.3% to 2.29 bln as amid the profit taking activities. 

• Leading the FBM KLCI winners list were Petronas Chemicals (+30.0 sen), KLCC (+11.0 sen), Axiata (+10.0 sen), Hong Leong Financial Group (+10.0 sen) and DIGI (+9.0 sen). Notable advancers on the broader market were Carlsberg (+44.0 sen), Bintulu Port (+23.0 sen), MPI (+16.0 sen) and Scientex (+15.0 sen). HSS Engineers jumped 17.0 sen higher after delivering strong set of quarterly results. 

• Plantations stocks like United Plantations (-60.0 sen), Batu Kawan (-20.0 sen) and Far East Holdings (-18.0 sen) retreated. Star Media Group and P.I.E. Industrial fell 19.0 sen and 13.0 sen respectively after reporting weak sets of quarterly earnings. Meanwhile, Nestle (-10.0 sen), Petronas Gas (-10.0 sen), Dialog Group (-7.0 sen), Hap Seng (-7.0 sen) and Sime Darby Plantation (-4.0 sen) were the major decliners on the local bourse.

• Asia benchmark indices closed mostly higher as the Hang Seng Index jumped 1.4% on optimism over the upcoming U.S.-China trade talks. The Shanghai Composite (+1.1%) managed to snap a five-day losing streak, but the Nikkei fell 0.3% after the Japanese Yen appreciated against the Greenback. ASEAN stockmarkets, meanwhile, closed mostly higher yesterday. 

• U.S. stockmarkets extended their gains overnight as the Dow added 0.3% on optimism over a trade deal with China. On the broader market, the S&P 500 climbed 0.2% to record its third consecutive winning day, lifted by gains in the basic materials (+0.7%) and energy sectors (+0.7%), while the Nasdaq closed 0.1% higher.

• Earlier, major European equities – the FTSE (+0.4%), CAC (+0.7%) and DA(+1.0%) all advanced after an eight-year-long Greece bailout officially ended. The positive sentiment was also boosted by the gains in energy shares – Total SA (+1.0%), BP PLC (+0.6%) and Royal Dutch Shell (+0.7%) after crude oil prices advanced.


• We still think stocks on Bursa Malaysia will sustain their near term uptrend in tandem with the positivity in most global indices that is bouyed by a potential breakthough in the U.S.-China trade impasse.  The ongoing results reporting season is also providing some trading impetus for market players to follow as the corporate results reported thus far have generally been an improvement.

• Still, we see the upsides remaining modest as further gains will again push the market’s valuation into the expensive territory. At the same time, market breadth is still modest for the most part, thus providing few opportunities for stocks to make substantive gains. Therefore, the 1,790 level remains the immediate resistances, while the 1,800 points level will continue to serve as the major hurdle. The supports, meanwhile, are at 1,780 and 1,770 respectively. 

• The lower liners and broader market shares were mixed yesterday with quick profit taking activities taking precedent that could continue for now as retail players continue to trade cautiously. 


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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