Market Pulse
Daily updates brought to you by Malacca Securities. 

FMB KLCI - DAILY - 17/5/2019

Hopeful Of A Firmer End To The Week

• Quick profit taking activities in selected index heavyweights drove the FBM KLCI (-0.8%) down and to erase all its previous session’s gains as investors brushed off the stronger-than-expected 1Q2019 GDP data. The lower liners – the FBM Small Cap (-0.6%), FBM Fledgling (-0.5%) and FBM ACE (-0.5%) all retreated, while the broader market finished lower with all 13 major sectors in the red.

• Market breadth turned negative as advancers overpowered decliners on a ratio of 2-to-1 stocks. Traded volumes fell 20.4% to 2.03 bln shares as investors remained on the sidelines amid the unabated concern over the recent volatility. 

• More than two thirds of the FBM KLCI components fell, dragged down by Nestle (-30.0 sen), followed by KLK (-28.0 sen), Public Bank (-22.0 sen), Malaysia Airport Holdings (-20.0 sen) and Hartalega (-16.0 sen). Consumer products giants like Fraser & Neave (-68.0 sen), Carlsberg (-56.0 sen) and BAT (-44.0 sen) fell, while Apex Healthcare and PMB Technology shed 21.0 sen and 15.0 sen on the broader market.

• On the contrary, significant gainers on the broader market were Heineken (+26.0 sen), Dutch Lady (+20.0 sen), Aeon Credit (+16.0 sen) and Hong Leong Industries (+10.0 sen). Pentamaster added 10.0 sen after reporting a strong set of corporate earnings. Meanwhile, Petronas Dagangan (+12.0 sen) was the sole winner on the local bourse. 

• Asia benchmark indices finished mixed as the Nikkei fell 0.6% amid the weak banking earnings from Mitsubishi UFJ Financial Group (-3.4%) and Mizuho Financial Group (-1.9%). The Shanghai Composite climbed 0.6%, while the Hang Seng Index (+0.02%) ended on a flattish noted after enduring a volatile trading session. ASEAN equities, meanwhile, closed on a mixed note yesterday.

• U.S. stockmarkets extended their gains for the third straight session as the Dow added 0.8%, boosted by solid quarterly
earnings from Cisco Systems Inc. and Walmart Inc. On the broader market, the S&P 500 rose 0.9%, while the Nasdaq closed 1.0% higher. 

• Earlier, European benchmark indices – the FTSE (+0.8%), CAC (+1.4%) and DAX (+1.7%) all also trended higher for the third straight session on easing global trade tension. In the meantime, the weaker Euro currency against the Greenback also boosted the positive market sentiment.


• The volatility on Malaysian equities was more pronounced-than-expected yesterday to still leave investor sentiments on the doldrums as the most recent recovery has come to naught. It is now hoped that yesterday’s global market positivity will permeate to Bursa Malaysia and help to improve the near term sentiments. 

• While we see potential near term recovery on Malaysian stocks, the overall market environment is still largely cautious amid the unresolved U.S.-Sino trade dispute that will continue to weigh on the market. At the same time, the country’s economic undertone is expected to turn weaker over the coming quarters even after it managed to put in a decent performance in 1Q2019. 

• Therefore, we think that any recovery will be tentative and even if the FBM KLCI passes the 1,600 points level, further gains will still be difficult to come by and we see the 1,610 level remaining the near term hurdle, followed by the 1,620 level. The supports are at 1,580 and 1,572 respectively. 

• Elsewhere, the lower liners are also seeing reduced following with fewer leads and a choppier market environment. While we also think that a positive end to the week is likely, significant gains will also be elusive as we think that traders will be quick to lock-in their profits.

















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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