Market Briefing, Wednesday
US Market :
U.S. stocks rose on Tuesday amid growing optimism that Republican lawmakers would be able to revamp the corporate tax system. Wall Street also looked to the Federal Reserve as its two-day policy meeting kicked off.
Europe Market :
European stocks closed higher Tuesday, as investors monitored upcoming policy meetings from the U.S. Federal Reserve and the European Central Bank (ECB).
Precious Metal Gold :
Gold prices retreated to a near five-month low on Tuesday as investors braced for a widely expected U.S. interest rate increase this week and looked for clues about further hikes from the Federal Reserve.
Crude Oil :
Oil prices fell on Tuesday, retreating after an early surge to a 2½-year high when the United Kingdom’s biggest North Sea oil pipeline was shut, crimping the flow of global benchmark Brent crude.
Indices & Commodities :
DJIA: 24,504.80 (+118.77)
S&P500: 2,664.11 (+4.12)
NASDAQ: 6,862.32 (-12.76)
DAX: 13,183.53 (+59.88)
FTSE: 7,500.41 (+46.93)
EuroStoxx50: 3,598.10 (+15.89)
Comex Gold: 1,241.7 (-5.2)
Comex Copper: 3.0230 (+.0115)
WTI Crude Oil: 57.14 (-.85)
Brent Crude Oil: 63.34 (-1.35)
Economic Events :
5.30PM – GBP Average Earnings Index +Bonus, Claimant Count Change
9.30PM – USD Core CPI
11.30PM – USD Crude Oil Inventories
3.00AM – USD FOMC Economic Projections, FOMC Statement, Fed Interest Rate Decision
3.30AM – USD FOMC Press Conference
FX & Bonds :
USD/MYR – 4.074
EUR/USD – 1.173
GBP/MYR – 5.433
AUD/MYR – 3.081
SGD/MYR – 3.012
Msia 10 yr Bond Yield – 3.97%
12/12/2017 Bursa Trade Stat :
Retail (18.81%) – net BUY 14.77mil
Institution (58.41%) – net SELL 171.22mil
Foreign (22.78%) – net BUY 156.45mil
Total traded value 2332.29mil
• Rhone Ma Holdings Bhd’s subsidiary Rhone Ma Malaysia Sdn Bhd has received an amended agreement to stop distributing multinational animal health company Merial’s swine, poultry, ruminant and veterinary public health products.
• UEM Sunrise Bhd is buying a 19.24-acre (7.79ha) leasehold land in Taman Equine, Seri Kembangan, Selangor from Kemaris Residences Sdn Bhd for RM109.5 million.
• Cocoaland Holdings Bhd has received revised tax audit findings for the years of assessment 2010 to 2014, from the Inland Revenue Board (IRB) on Dec 6.
• Kuala Lumpur Kepong Bhd (KLK) plans to acquire Elementis BV’s surfactant chemicals business and its 16.2-hectare Delden manufacturing plant in the Netherlands for a total enterprise value of €39 million (or RM187.2 million), on a cash-free debt-free basis and with a normal level of working capital.
• Aeon Co (M) Bhd has lowered its stake in the joint venture (JV) with Thai company Index Living Mall Company Ltd (ILM).
• Magni-Tech Industries Bhd’s net profit dropped 28% to RM20.5 million or 12.6 sen per share in in the second quarter ended Oct 31, 2017 (2QFY18), from RM28.52 million or 17.53 sen per share a year ago, due to lower garment sales and the closure of its offset printing packaging business.
• Anzo Holdings Bhd’s construction unit has bagged a RM28.91 million sub-contract to build a 14-storey office building in Jalan Hospital Bandar, Ipoh, Perak.
• Fajarbaru Builder Group Bhd has won a RM22.05 million contract from Pos Malaysia Bhd to renovate the latter’s Integrated Parcel Sortation Centre at Pos Malaysia International Hub at the Kuala Lumpur International Airport.
• Pos Malaysia Bhd expects its courier arm Pos Laju to contribute a revenue of about RM700 million this year and sustain a growth of 20% to 21% next year, according to a Bernama report.
• Malaysia Airports Holdings Bhd (MAHB) said the number of passengers passing through the 39 airports it manages in the country rose by 4.8% year-on-year (y-o-y) in November 2017.
Source from: www.theedgemarkets.com
KLSE OUTLOOK FOR 13-12-2017 (WEDNESDAY): MORE TECHNICAL REBOUND BUT TAKES MORE THAN A BOUNCE TO CHANGE THE DOWNTREND – FRED TAM
The KLCI was higher by 10.10 points or 0.59% to close at 1729.57 and gainers beat losers by 500 to 372 while 986 counters remained unchanged.
Our stock market was “impressive”, leaping 10.10 points yesterday.
Coupled with a close where gainers beat losers, there is much hope for further rallies.
We say “hope” because yesterday’s double-digit rebound is (for now) nothing more than a “flash-in-the-pan”. We fear that this bounce might be short-lived and the market reverts back to the downtrend that it was in.
There is a saying that one swallow don’t make a summer.
The KLCI was higher due to the performance of a handful of index stocks. The discount on FKLI futures under cash of about 8 points is also hinting that players are still bearish on stocks.
So how do we categorise the rebounds from numerous small cap penny stocks?
Stocks like GHLSYS, CARIMIN, ALAM, KEYASIC, MNC, GDEX, REACH, COASTAL, ALAM, MIKROMB, DUFU, FRONTKEN, N2N, AEMULUS, CAB, CAB-WA, TMCLIFE, MMV, D&O, COMFORT, for instance all rebounded.
Yes, they have rebounded – but from an oversold position. This means that their rally may be short-lived. Hence, if you are buying these stocks, be ready to sell off if you have a profit. Until they rebound back above their key support (above the 50-day EMA), there is a possibility that they can correct back down.
Stocks-to-watch for today (Wednesday) are: HIBISCS, HENGYUAN, PETRONM,GENM, INARI, INARI-WB, GKENT.
Note that IQ GROUP’s rally is currently viewed as a technical rebound. MASTEEL and LIONIND, MALTON, MALTON-WB are also viewed as technical rebounds. PENTA is neutral.
In short, be still cautious about our stocks and market. Except for a few TAD stocks, the others may well be technical rebounds. A fast-in-fast out strategy may be the safest in a soft market like ours.
A word on FCPO. Yesterday FCPO closed at 2471, unfolding a “homing pigeon”. A homing pigeon is a potentially bullish Japanese candlestick buy signal. For an aggressive trader it is a buy signal but for conservative traders you will need a confirmation via a close at 2496 or higher. If you had bought, sell stop is at 2454 or lower.
Have a great Wednesday and good trading!