KUALA LUMPUR: Hwang DBS Vickers Research said after extending its run-up to linger somewhere above the psychological mark of 1,500, what's next?
In its outlook report issued on Monday, Nov 1, it said bit by bit, the key FBM KLCI edged higher through the week, chalking up a weekly increase of 15.0-points or 1.0% to settle at its intra-week high of 1,505.66 on Friday.
Similar gains were also made by the FBM 70 Index (+0.6%) and the FBM ACE Index (+1.7%) as rotational plays dominated the market activity. Daily average volume, meanwhile, eased a little to 1.3b shares (from 1.4b units) valued at RM1.7b (RM1.7b previously).
'The spotlight for this week will be on the external front. To be more specific, greater-than-usual interest will be shown when the U.S. Federal Open Market Committee (FOMC) meets on Tuesday and Wednesday (Nov 2-3).
'And for a change, the attention should be less on interest rate hikes (which are not expected to be forthcoming anytime soon). Instead, all ears will be on an expected announcement by the policymakers regarding details (specifically the size and time-span) of another asset purchase program,' it said.
Hwang DBS Vickers Research said also called the QE2 (Quantitative Easing Part 2), this will result in the injection of additional money into the financial system.
While the action of increasing money supply will hopefully stimulate economic activity and boost employments ' the effectiveness of which will only be known later on ' its effects could be felt quicker in the global equity markets.
Hwang DBS Vickers Research said essentially, the flood of liquidity in search of better returns may soon make its way to the growing Asian economies. In turn, this would drive up local currencies and inflate the prices of financial / property assets.
If so, then emerging markets like Malaysia will stand to benefit too. An inflow of funds could be looking for new investment opportunities on our domestic bourse especially should the US$ continues to lose its value against other currencies including the Ringgit.
For a macro feel, foreigners may also want to assess our economic conditions. They will get to check the September external trade statistics, which will be out on Wednesday (3 Nov), particularly the exports and imports performance vis-''-vis its regional peers following the strength of the Malaysian currency.
In addition, an update on the international reserves level as at 29 Oct (scheduled for release on Thursday, Nov 4) could offer a hint or two on the appeal of our country in attracting fund flows after it registered a larger-than-normal fortnightly increase of US$4.8b in the second half of Sep and US$3.9b in the first half of Oct, respectively.
Hwang DBS Vickers Research said at the rate our local bourse is going, its bellwether FBM KLCI could be tiptoeing its way to its previous record peak of 1,524.69 sooner or later. Standing at a fresh 33''-month high at this juncture, a breakout from its immediate resistance barrier (of 1,525) may then send the benchmark index to scale a series of higher highs going forward.
On the chart, the FBM KLCI would be subsequently eyeing 1,550 as its next resistance target.
Hwang DBS Vickers Research said even as the key barometer is now riding on a positive momentum within a mini upward sloping passage, the possibility of intermittent market corrections still exist.
If the FBM KLCI ' after climbing in 18 out of the past 22 weeks for a cumulative gain of 236.5-point or 18.6% ' slides below the resistance turned- support level of 1,495, then the second support line is seen at 1,465.
'Any pullbacks, nonetheless, will probably be short and shallow, which have been the case since late-May this year,' it sais.
In its outlook report issued on Monday, Nov 1, it said bit by bit, the key FBM KLCI edged higher through the week, chalking up a weekly increase of 15.0-points or 1.0% to settle at its intra-week high of 1,505.66 on Friday.
Similar gains were also made by the FBM 70 Index (+0.6%) and the FBM ACE Index (+1.7%) as rotational plays dominated the market activity. Daily average volume, meanwhile, eased a little to 1.3b shares (from 1.4b units) valued at RM1.7b (RM1.7b previously).
'The spotlight for this week will be on the external front. To be more specific, greater-than-usual interest will be shown when the U.S. Federal Open Market Committee (FOMC) meets on Tuesday and Wednesday (Nov 2-3).
'And for a change, the attention should be less on interest rate hikes (which are not expected to be forthcoming anytime soon). Instead, all ears will be on an expected announcement by the policymakers regarding details (specifically the size and time-span) of another asset purchase program,' it said.
Hwang DBS Vickers Research said also called the QE2 (Quantitative Easing Part 2), this will result in the injection of additional money into the financial system.
While the action of increasing money supply will hopefully stimulate economic activity and boost employments ' the effectiveness of which will only be known later on ' its effects could be felt quicker in the global equity markets.
Hwang DBS Vickers Research said essentially, the flood of liquidity in search of better returns may soon make its way to the growing Asian economies. In turn, this would drive up local currencies and inflate the prices of financial / property assets.
If so, then emerging markets like Malaysia will stand to benefit too. An inflow of funds could be looking for new investment opportunities on our domestic bourse especially should the US$ continues to lose its value against other currencies including the Ringgit.
For a macro feel, foreigners may also want to assess our economic conditions. They will get to check the September external trade statistics, which will be out on Wednesday (3 Nov), particularly the exports and imports performance vis-''-vis its regional peers following the strength of the Malaysian currency.
In addition, an update on the international reserves level as at 29 Oct (scheduled for release on Thursday, Nov 4) could offer a hint or two on the appeal of our country in attracting fund flows after it registered a larger-than-normal fortnightly increase of US$4.8b in the second half of Sep and US$3.9b in the first half of Oct, respectively.
Hwang DBS Vickers Research said at the rate our local bourse is going, its bellwether FBM KLCI could be tiptoeing its way to its previous record peak of 1,524.69 sooner or later. Standing at a fresh 33''-month high at this juncture, a breakout from its immediate resistance barrier (of 1,525) may then send the benchmark index to scale a series of higher highs going forward.
On the chart, the FBM KLCI would be subsequently eyeing 1,550 as its next resistance target.
Hwang DBS Vickers Research said even as the key barometer is now riding on a positive momentum within a mini upward sloping passage, the possibility of intermittent market corrections still exist.
If the FBM KLCI ' after climbing in 18 out of the past 22 weeks for a cumulative gain of 236.5-point or 18.6% ' slides below the resistance turned- support level of 1,495, then the second support line is seen at 1,465.
'Any pullbacks, nonetheless, will probably be short and shallow, which have been the case since late-May this year,' it sais.
No comments:
Post a Comment