Market Pulse
Daily updates brought to you by Malacca Securities. 

FMB KLCI - DAILY - 14/12/2018

Continuing Recovery

• Tracking the positive sentiment on Wall Street overnight, the FBM KLCI (+0.8%) extended its gains yesterday, boosted by the potential easing of the U.S.-China trade tension. The lower liners – the FBM Small Cap (-0.3%), FBM Fledgling (-0.3%) and FBM ACE (-1.6%), however, extended their losses after erasing their intraday gains, while the broader market closed mostly higher.

• Market breadth turned negative as decliners edged advancers on a ratio of 397-to-371 stocks. Traded volumes slipped 24.2% to 1.57 bln shares as investors remain wary on the recent market volatility.

• More than two-thirds of the key index’s constituents advanced, led by Nestle (+90.0 sen), followed by Petronas Dagangan (+66.0 sen), Hong Leong Bank (+28.0 sen), Hong Leong Financial Group (+28.0 sen) and Malaysia Airport Holdings (+20.0 sen). Anchoring the advancers on the broader market were Fraser & Neave (+88.0 sen), Panasonic (+28.0 sen), Genting Plantations (+25.0 sen), Khind Holdings (+22.0 sen) and Heineken (+14. sen).

• Meanwhile, significant decliners on the broader market include Ajinomoto (-28.0 sen), BAT (-24.0 sen), Tasek Corporation (-15.0 sen), Heng Yuan (-13.0 sen) and Westports (-12.0 sen). There were only three decliners on the key index – Hartalega (-9.0 sen), Tenaga (-4.0 sen) and Dialog (-1.0 sen).

• Asia benchmark indices remain upbeat on the positive trade developments between U.S. and China as the Nikkei added 1.0%, while the Hang Seng rose 1.3%. The Shanghai Composite climbed 1.2% on expectations of further policy measures to address the economic slowdown. ASEAN stockmarkets, meanwhile, closed mostly higher yesterday.

• U.S. stockmarkets finished mixed overnight with the Dow gaining 0.3% as investors digested the latest developments on U.S.-China trade spat. On the broader market, the S&P 500 and Nasdaq, however, fell 0.02% and 0.4% respectively after erasing all their intraday gains.

• Earlier, European equities – the FTSE (-0.04%), CAC (-0.3%) and DAX (-0.04%), all retreated after enduring a choppy trading session. Meanwhile, the European Central Bank (ECB) formally ended Quantitative Easing program that pumped in €2.6 trn into the European economy over the past four years in order to stoke growth and inflation.


• While selective stocks on Bursa Malaysia continue to make headway yesterday, the buying remained selective and on low volumes. As it is, investor interest has yet to return in full as most market players are still wary of the underlying market environment, judging by the lack of market following in the ongoing recovery.

• Although the uptrend looks to continue that will allow the key index to end the week on a positive note - in tandem with the sustained positivity in overseas markets, we think the buying will remain selective. Gains will still be concentrated on the big cap stocks, while the broader market stocks will continue to drift due to the lack of following. Hence, we see the key index re-challenging the 1,680 level, before heading to the 1,690 resistance. The supports are at 1,670 and 1,650 respectively. 

• Meanwhile, there remains little reprive for the lower liners and broader market shares as they continue to head south amid the thinning interest from retail players. Although the indices are oversold, there are still few signs of a rebound as yet and the downside bias remains for now. 


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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