Hidden inside every chart is a story. A story about where the price has been and where it might go in the future. Some stories are obvious. Others are a little more difficult to figure out.
Indices Updated : 06:59:05
Sunday, September 30, 2007
Still Positive
KLCI ends almost flat, closing +0.64 points at 1336.30 in heavy volume of 1.27 billion shares but off intraday high of 1344.13; Pre-weekend profit taking narrowed gains as short term retail investors sold into strength, but uptrend remains intact. Market breadth remained positive with advancers narrowly edging decliners 428 to 401. KLCI tipped in 1330-1350 range next week. Third quarter window dressing activities by local funds helped to keep the market buoyant while gains on Wall Street (Thursday) cheered retail players. Telekom's proposal to decouple its fixed and mobile operations was a positive move and is likely to lead the market's gains next week on requotation.
KLCI +1.2% at 1336.02 in heavy volume, buoyed by local funds ahead of Eastern Corridor Economic Region announcement by Petronas; market breadth positive with gainers leading decliners 481 to 231. Overnight gains on Wall Street as catalyst, while absence of selling pressure from foreign funds allowing market to gain traction. Benchmark tipped to rise to trade in 1320-1334 range for rest of day with upside bias. Some window-dressing (by local funds) can be expected as we approach the end of the of the third quarter.
KLCI +0.5% at intraday high of 1323.64 in moderate volume despite intermittent profit-taking; market breadth negative with decliners leading gainers 352 to 332. Construction stocks are leading the way with WCT Engineering adding 4.8% at MYR7.65 and IJM gaining 3.8% at MYR8.10. Local government funds are selectively accumulating blue chips, but retail players continue to sell into strength, benchmark expected to stay in 1320-1330 range. Among gainers, MPHB +7% at MYR1.84, Golden Plus +8.5% at MYR1.80 and Silverbird +20.8% at 61 sen, all on possibility of new major shareholders emerging. Value hunting boosts Landmarks +4.8% to MYR2.60 after Alliance Research says shares could be worth a much as MYR3.60 if company obtains casino license on Indonesia's Bintan island.
KLCI +0.4% at 1322.40, off intraday high of 1327.82; market breadth negative with decliners leading gainers 411 to 278 as profit-taking narrows early rise.Market likely to drift within 1315 to 1325 with downside bias for rest of day as investors lock in profits. Buying interest in blue chips is largely from local funds. There's a fair amount of retail interest in speculative issues, such as Golden Plus and Nagamas, but this is mostly due to day traders.
KLCI ends +0.9% at 1317.24 in heavy volume despite initial jitters, buoyed by hefty gains in handful of heavyweight. Market breadth turned positive in afternoon trade; gainers outpaced decliners 515 to 314. Index tipped in 1315-1330 range tomorrow in follow through trade. It was a jittery start with profit-taking weighing on the market in early trade but this was soon overshadowed by firmer plantation stocks and a hefty rise in heavyweights such as Bursa Malaysia and Tenaga Nasional. The heavy volume traded suggests follow through buying may lift the KLCI higher to around 1330 tomorrow. Bursa ended +10.9% at MYR11.20 on M&A speculation, Tenaga +4.8% at MYR9.85 on bargain hunting while plantations Sime Darby +2.5% at MYR10.20 and KL Kepong +1.6% at MYR13.10 on bullish outlook for CPO Prices. Profit-taking weighed on Golden Plus down 24.5% at MYR1.63.
KLCI ends down 0.2% at 1305.94 in moderate trade; volume at 1.1 billion, with market breadth positive as gainers beat decliners 485 to 296. Benchmark dragged down by weakness in Wall Street overnight, profit-taking ahead of the weekend on select blue chips that were higher in previous days; but recovery expected next week. KLCI tipped in 1300-1320 range. The market managed to close above 1300 for the second time in a row, which some consider a sign of underlying strength. If Wall Street goes higher tonight, all the ingredients would be in place for the market to test 1320 next week. Insurance-related stocks led gainers; Golden Plus +63.6% at MYR2.16 after confirming interest in PanGlobal Insurance, Idaman +25% at 30 sen; MAA +28% at MYR2.15; plantation stocks higher on rising palm oil prices, with IOI Corp +1.7% on MYR6; among decliners, Petronas Gas down 1.8% at MYR11.10, Maybank down 3.5% at MYR11.10, both on profit taking.
KLCI ends +1.6% at 1297.16 in heavy volume of 1 billion shares, tad off intraday high of 1298.70; this after U.S. Fed's surprise decision to cut interest rates by 50 basis points triggered a triple digit rally on DJIA overnight. Market breadth remained positive, closing with 600 gainers vs 255 decliners. KLCI may consolidate within 1280-1300 range tomorrow after failing to test and breach 1300 psychological resistance. The DJIA's 2.5% jump overnight and strong gains in regional bourses triggered a fair amount of buying interest but persistent selling by foreign funds capped the benchmark's rise. The quantum of the rate cut has also caused some concerns among investors. Some are concerned that the subprime issue and credit crisis runs much deeper than initially assumed. Expects Wall Street's performance tonight to determine KLCI's direction tomorrow.
KLCI ends almost flat, down 1.01 points at 1277.33 in thin volume, off intraday low of 1270.72; local government-linked funds helped shore-up market in last hour of trade, say dealers. Market breadth turned positive; gainers outpaced decliners 500 to 281. KLCI expected to trade in 1266-1296 range tomorrow. Retail investors were reluctant to take up fresh up positions ahead of the FOMC meeting later today. Expectations are quite high that there will be a rate cut of either 25 or 50 basis points. Market action tomorrow will be driven primarily by what the Fed decides tonight.
KUALA LUMPUR, Sept 18 (Reuters) - Malaysia will launch a programme next month to transform its ethnic Malay heartland into an economic powerhouse by pouring in funds of 112 billion ringgit ($32 billion) by 2020, local media said on Tuesday.
As expectations grow that Prime Minister Abdullah Ahmad Badawi could call early national elections by early 2008, the region will become the third development corridor his government has launched in efforts to position Malaysia for future growth.
Agriculture and tourism are key focus areas in the plan, which earmarks 40 percent of the funds to strengthen transport links and infrastructure in some of Malaysia’s poorest states, state news agency Bernama quoted the chief of national oil firm Petronas as saying.
“The thrust of the East Coast Economic Region will be agriculture and tourism,” said Hassan Marican, chief executive of Petroliam Nasional Bhd (Petronas), charged with chalking out the plan to rejuvenate a region that is home to 4 million people.
Malaysia will woo foreign investors to participate in the plan, which expects to raise a fifth of the needed $32 billion from the private sector, another 27 percent from public-private initiatives, and the rest from government, he added.
Petronas also intends to invest in the region, Hassan said. "We will be investing in the oil and gas like we have been doing all this while,” he said, but gave no further details.
Abdullah will kick off the East Coast Economic Region (ECER), which sprawls across 51 percent of the Malaysian peninsula, through the northeastern states of Kelantan, Terengannu and Pahang to Mersing in southern Johor, on October 30 and 31.
Energy, petrochemicals, manufacturing and education are other sectors targeted in the plan, while the property sector will get a boost from moves to ease development of land that cannot currently be sold to non-Malays.
About 40 percent of the land not owned by the government in the eastern development region is in this category, Bernama said.
“Among the ideas for optimising Malay Reserve Land is to set up a trust that will develop the land,” it quoted Hassan as telling newspaper editors at a briefing. “Owners of the land can be members of the trust fund.”
Bernama later said Hassan had asked for reports of his comments to be held back until Wednesday afternoon, but the remarks had already been widely circulated on several news Web sites.
In July Malaysia launched a $51 billion development plan to turn its mainly agricultural north into a logistics, food-processing and tourism zone by 2025.
Last November, it unveiled an ambitious two-decade blueprint to turn 2,200 square km (850 square miles) of Johor into an industrial and tourist zone. ($13.485 ringgit)
KUALA LUMPUR, Sept 18 (Bernama) - About 40 percent of the RM112 billion to be invested in the East Coast Economic Region (ECER) covering Kelantan, Terengganu, Pahang and Mersing district in Johor will be spent on major transportation linkages and other key infrastrcuture facilities.
Petronas president and chief executive officer Tan Sri Mohd Hassan Marican said the provision of greater access and enhanced transportation networks would be a crucial determinant for development and growth in the region.
Petronas is the master planner for the economic region, which comprises 66.736 sq km of land or 51 percent of Peninsula Malaysia. The ECER will be launched by Prime Minister Datuk Seri Abdullah Ahmad Badawi in Kuala Terengganu and Kota Bahru on Oct 30 and in Kuantan on Oct 31.
The ECER is the third development region to be launched by Abdullah this year after the Iskandar Development Reion in Johor and the Northern Corridor Economic Region covering states in northern Peninsula Malaysia.
Factoring in the population of 3.9 million in the ECER against the total spending, an estimated RM30,000 would be spent on each individual in the region during its implementation between now and 2020, he told an editors’ briefing on the ECER here today. The population in the ECER is 14.5 per cent of the total national population of 26.8 million and the region is also the Malay heartland as bumiputeras form the bulk of the population at 86.6 per cent. This is followed by the Chinese at 7.8 percent, Indians at 1.8 percent and others at 3.8 per cent.
The enhanced road infrastructure will include Phase Three of the East Coast Expressway linking Kuala Terengganu and Kota Baharu, Phase Four of the expressway connecting Kuantan to Johor Baharu and a road linking Temerloh to Kuala Pilah.
Hassan said of the RM112 billion, 20 percent would be financed by the private sector, 27 percent via private finance initiative (PFI) and the rest by the government.
Hassan explained that the main objective of the ECER Development Plan is to accelerate growth in the region in a viable, equitable and sustainable manner.
Among others, it will address the economic imbalance in the region as the ECER states have among the lowest average household incomes in Malaysia. Terengganu and Kelantan are states with the highest incidence of poverty in Malaysia, accounting for 15.4 percent and 10.6 percent of poverty in the country, followed by Pahang at 4.9 percent.
Under the ECER masterplan, a total of 561,000 jobs will be created by 2020 and hardCore poverty will be cut to zero.
The gross domestic product (GDP) for ECER will be raised to 7.2 per cent by 2020 from 5.7 per cent in 2005.
Both Terengganu and Pahang are targeted to grow at 7.5 per cent with Kelantan at 6.4 per cent.
Among others, the mission of the ECER is to move the economy up the value chain, raise capacity for knowledge and innovation, address persistent socio-economic inequalities, improve the standard and quality of life and strengthen the instititional and implementation capacity.
Apart from tackling accessibility to the region, the regional imbalance (West Coast states versus East Coast states) and the incidence of hardcore poverty, the ECER would also address income inequalities between the rural and urban populations and basic infrastructure, as well as to optimise the property sector, including tapping the potential of Malay Reserve Land, said Hassan.
“Among the ideas for optimsing Malay Reserve Land is to set up a trust that will develop the land. Owners of the land can be members of the trust fund,” he explained.
Excluding government-owned land, a whopping 40 percent of the land in the ECER are Malay Reserve Land.
Hassan said the development masterplan would capitalise on the more than 190 training institutes and institutions of higher learning in the ECER, which were mostly underutilised, with the aim of not only using them to train locals to move up the value chain but also to attract those outside the region to study there.
Besides education, he said the other sectors that had been identified to revitalise the region were tourism, oil and gas, petrochemicals, manufacturing and agriculture and education.
“The thrust of the ECER will be agriculture and tourism,” he added.
“The plan can succeed. It will have one council, its bill is being drafted to be tabled in Parliament in December,” said Hassan.
He said the council, whose members include the prime minister and deputy prime minister, the menteris besar of the four states, two cabinet ministers and representatives from the private sector, would be responsible for the implementation.
He said it was too early to say whether it may establish an authority just like the IDR or NCER for its operations.
Hassan said during the formulation of the ECER development plan, Petronas had spoken to all four state governments, including representatives from the Opposition-led Kelantan state government.
“If there is focus and strong commitment, there is no reason why the ECER could not succeed,” he stressed.
On agriculture, Hassan said it would include citrus and pineapple planting, goat-rearing, herbal cultivation and growing of rubber trees specifically for timber to be used in furniture-making.
“We have identified 50,000 to 100,000 acres of land for growing rubber trees for timber,” he said.
This also meant that furniture-making activities, now concentrated in the southern part of Peninsula Malaysia, could be attracted to the ECER, he added.
As for attracting forein direct investment (FDI), Hassan said the objective is to attract all kinds of FDI, either big or small, in areas like tourism, manufacturing and education.
For Petronas, he said, “We will be investing in the oil and gas like we have been doing all this while.”
Hassan said Petronas took seven to eight months to complete the master plan, which would be officially handed over to the government at the ECER’s launch.
Petronas, he said, could be one of the private sector representatives in the council that would run the ECER.
Malaysia shares end +0.4% at 1289.50 in thin volume, off intraday high of 1294.68 as pre-weekend profit taking dragged most stocks off their highs. Market breadth remained positive despite mild selling pressure; at close gainers outpaced decliners 498 to 290. KLCI tipped to trade within 1281-1305 range next week. Wall Street's gains overnight helped to muster-up some buying interest among retail investors and local funds but foreign funds continued to sell into strength. Volume traded was relatively thin as most investors were reluctant to take up fresh positions ahead of the FOMC meeting on Tuesday.
Malaysia shares end down 0.39 points at 1285.94 in moderate volume as investors locked-in profits from intraday high of 1296.83. Market breadth turned negative midday; decliners outpaced gainers 509 to 303 by close. Benchmark tipped in 1281-1296 range tomorrow. Gains on Wall Street helped to lift a broad range stocks in early trade but investors locked-in profits, underscoring the cautious sentiment. The start of the Muslim fasting month tomorrow is likely to result in lower retail participation. Investors will continue to take their cue from Wall Street.
Financial markets have always been good at turning lemons into lemonade, but the popularity of one such move is leaving a sour taste for hedge funds across the globe.
When Japan's stock market and real estate bubble burst in the early 1990s, it kicked off a vicious wave of deflation that eventually pushed interest rates in that country to zero percent and has kept them well below those in the rest of the world, even during its incipient recovery.
Cue hedge funds, who have made a fortune borrowing in yen and plowing the cash into higher-yielding assets from Icelandic bonds to Australian real estate to U.S. collateralized debt obligations. This works great much of the time, but the popularity of the strategy has made periods of financial turbulence even more chaotic for investors.
"It's like the old saying about picking up nickels in front of a steamroller: It looks easy, but sooner or later you get crushed," said Chris Watling, president of London consulting group Longview Economics.
Currency volatility would seem to be an issue far-removed from U.S. equity prices, but a handful of stock market veterans like Art Cashin of UBS have long warned investors to "watch the yen," remembering the way in which it helped make the 1998 Russian debt default into a far more serious financial event.
Both in 2007 and 1998, currency-specific factors such as the U.S. current account deficit or relative interest rates had nothing to do with starting the crisis itself, but big borrowings in yen greatly worsened the damage.
"It's a tsunami, it's a force unto itself," said Quincy Krosby, chief investment strategist at Hartford Financial. "It helps to exacerbate the effects of a trend in the market when you have a huge unwind."
Estimates of the size of the yen carry trade vary from $130 billion to $450 billion, and even the Bank of Japan doesn't have a full grasp of the sums involved. The notional size of bets made with these borrowings could be much larger through use of derivatives.
Watling and Krosby point out that the rapid unwinding of borrowing in yen was just a symptom of excesses elsewhere in the system and not the proximate cause of recent volatility.
"This was a wave of risk aversion with a carry trade behind it, so it was a source of funds," said Watling. "There's always a source of funds."
But it's more complicated than that. Central banks that find their currency under selling pressure often have their hands tied in terms of avoiding even more painful steps, such as boosting rates. A currency that is too strong can be more easily remedied. Japanese authorities used to intervene massively, but they have been on the sidelines since 2004 as hedge funds were only too happy to sell yen for them as asset prices boomed.
"Essentially, the yen carry trade has done the job of intervening," said Krosby. Now the question hanging over the market is if the Bank of Japan will intervene if there is another bout of weakness caused by market turbulence.
Watling considers it a moot point at the moment, saying the markets have now had their catharsis and the wave of choppiness has in all likelihood passed. Volatility remains high, which is often a great buying signal, and he is optimistic about equity markets.
Krosby is somewhat more skeptical and urges investors to keep an eye on further yen strength, among other measures, as an indicator all may not be well.
"September could be a pretty dicey month," she said.
Malaysia shares end almost flat, shedding 0.39 points to 1283.75 in moderate volume from intraday high of 1288.21 as investors sold into strength. Market breadth negative; decliners beat gainers 464 to 371. KLCI tipped to trade in 1267-1297 range (within 50% to 61.8% retracement of fall to 1141.56) tomorrow; investors will take cue from DJIA's performance tonight for direction. In the absence of guidance from U.S. stocks (markets closed for Labor Day), trading interest was muted. Some speculative issues and big caps gained but selling into strength kept the KLCI within a tight range.
KLCI +1% at 1286.62 in thin volume, supported by gains in construction and property heavyweights and some government-linked companies. Note profit-taking into strength beginning to accelerate; ratio of gainers to decliners at 512 to 220, narrowing. KLCI tipped to stay in 1270-1292 range. Investors are taking a cautious approach and locking-in profits. There will also be no guidance from the U.S. tonight due to Labor Day holiday. Expects sideways trading to persist.
This is based on Fibonacci Time Projection Method. The methodology will calculate a trend change date. It will not indicate by itself whether this date will be high or low, only that a change in trend is probable.
I'm a hardcore Technical Analysis Trader in the Malaysian stock-broking industry. This is a personal weblog, reflecting my personal views and not the views of anyone or any organization. THIS BLOG ALSO DEDICATED TO MY SUBSCRIBERS WHO HAVE ENCOURAGED ME AND TO THE THOUGHTFUL TRADERS WHO DESIRE TO FOLLOW PRACTICAL RULES FOR TRADING INSTEAD OF GUESSWORK AND GAMBLING METHODS.
