Monday, September 13, 2010

HLG Research: KLCI likely to consolidate with limited upside bias

KUALA LUMPUR: HLG Research expects China's robust industrial output of 13.9% in Aug (consensus: 13%) and Dow's resilient performance to provide fillip to regional markets and Bursa Malaysia on Monday, Sept 13.

It said due to FBM KLCI's overbought position after 4th consecutive weekly gains, it is likely to consolidate with limited upside bias, but lower liners and small cap stocks could see increased participation by retail investors returning from the long festive break.

On top of rerating catalyst on Yuan following the stronger-than-expected Aug industrial output, the ringgit may continue to appreciate following Prime Minister Datuk Seri Najib Razak's statement in a related interview with CNBC Asia that the country may consider allowing the ringgit to trade offshore if it will help the economy. Moreover, it can be an immediate-term catalyst for the benchmark index to strengthen further

For Wall Street, the Dow is likely to trade range bound within 10,000 to 10,720 (three-month high) in the near term ahead of the major FOMC meeting on Sept 21.

Major economic announcements this week are August retail sales (Sept 14), Aug IPI (Sept 15), Aug CPI and weekly jobless claims (Sept 16), Aug CPI and September consumer sentiment (Sept 17).

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