Will Stocks Christmas Rally For 2011?

Thus far in 2011 the overall stock market movement has been much different from what we had in 2010. This year we have seen nothing but sideways to lower prices with wild price swings on a day to day basis. There just has not been any really solid trends to take advantage of this year. Instead we had to actively trade the oversold dips and sell into the overbought rallies to just pull money out of the market on a monthly basis. Last year we saw 3 major rallies that lasted several months making it easy for anyone who bought into the trend to make money if managed properly

Base on the history of S&P share market, now the market is in oversold and in compare, the market will rebound and move sideways till the end of the year, howeverit may depending how things unfold in Europe in coming week.

Back home, Malaysia share market may follow most of Asia share market but the positive point is GE13 will likely at Jan during CNY, base on this any good news from US and Europe will help to push KLCI index fly sky high above 1,530 level.

How Low Will The KLSE Market Go?

In the month of Sept 2011, Gold, Silver, Oil and Share dip due to no more Money printing to support the price. Without QE3, US Dollar value is moving up everybody wants to sell everything except US dollars.

Foreign investor sell every share in Malaysia to change back to US Dollar and EPF pull down the share for Foreign investor to sold in lower price and at the same time cause panic selling. So how low will the KLSE Market go, I think 1,280 level likely due to this level is the QE2 printed money start flow into share market.

FBM-KLCI Correction Could Be In The Horizon

As we near the end of 3Q09, FBM KLCI likely to move sideways, even after rising 13% since end-Jun. Base on some report statistic, this rates KLSE stock exchange as the third worst performing market among the 11 Asian markets that report tracked, better than only Japan (+3%) and China shares listed in Hong Kong (+10%).

The top winners in the current quarter are Korea (up 22% quarter-to-date), Thailand (+21%) and Indonesia (+21%). On a year-to-date basis, we have fared even worse – at the second lowest rung (up 39%) just ahead of Japan (+16%) – way behind the best performers like Indonesia (up 80% so far this year), India (+73%) and Thailand (+60%). This statistic show that foreign investor is not going to invest into Malaysia like as before economic crisis. I think Malaysia goverment have note this early by change KLCI index base on 100 share to 30 share and FBM-KLCI index can be control by top 5 share out of 30 component share so that the index will not drop a lot compare with other 11 Asian markets.

How worst Malaysia economic in real I think only government will know. However the Malaysia government need to keep the index in good shape even how worst it is due to political reason so I think profit still can get in ours share market. Forward to domestic themes ahead, focusing on specific events like the 2010 Budget, the announcement of a National Automotive Policy (NAP, likely in Oct) and the impending listing of mobile telecommunication heavyweight Maxis (by year-end) will likely to give some energy to the index.

Closer on the calendar, on Wednesday (30 Sep), the monthly banking statistics for Aug will be out. And this Friday (2 Oct), an update on the business transformation plan by Malaysian Airline System – a laggard among the index component stocks – is scheduled to be held.





















Meanwhile base on HwangDBS report, supposing that the FBM KLCI has already plotted a fresh (temporary) peak on the chart last week, a correction could be in the horizon. Still, if recent history repeats itself, any market pullback is expected to be shallow (down by less than 7%) and short (extending fewer than seven days). Essentially, the benchmark index’s uptrend pattern – as guided by a rising channel comprising higher highs and higher lows – seems set to stretch on.
Technically speaking, should our market slide the first and second support lines are seen at 1,190 and 1,160, respectively. Beyond the consolidation phase, we reckon the FBM KLCI will get back in position to overcome 1,230 (the immediate resistance barrier) before sizzling its way towards 1,255 (its next resistance target).

3Q2009 Is About To Over Will Black October Emerge?

3Q2009 is about to over in next week and if you still remember last year 2008 October is one of the month KLCI index drop the most to hits lowest that year at about 800 point. Most of the investor will call that month as a "Black October".

Black October actually not only happen in last year but happen a few time in history of world share market. Now will it happen in this year? Base on the chart, FBM KLCI index likely to move sideways and I think the index will well supported due to it can be control by top 5 share out of 30 component and plantation share will likely to give support to the index when banking sector is out of momentum.

























I think 3Q09 result will just about same with 2Q09 due to this 3Q the economic is drop by H1N1 and retail businuess will be the one hits hard. However Bank Negara still flow out the good news about Malaysia economic but how many investor will believe it. I think better now come out from share market and wait till the market correction before reinvest again.

I still believe the economic is getting better but now is just over brought and if buy during share market drop will bring more profit.

Market Focus Report From HwangDBS

Expect lower deficit.
The 2010 Budget will be presented in Parliament on 23 October amidst a challenging economic
environment. The Prime Minister will need to steer the economy towards robust economic growth while keeping the lid on a ballooning fiscal deficit. We expect a lower deficit in 2010 at 6.8% of nominal GDP versus 8.5% this year on lower operating expenses. In our opinion, there is a possibility of incremental corporate tax cut and a timeframe for Goods and Services Tax (GST) implementation in the future.

Higher development expenditure.
In terms of development expenditure, we expect a record allocation of RM55b-RM58b from
RM53.7b in 2009. As pump-priming remains a cornerstone to drive economic growth, there will likely be renewed emphasis on the upcoming mega projects such as the LCCT, LRT extension and Interstate Water Transfer – which should start latest by next yearend. The focus should be on implementation of these key projects and as such, we do not expect many other new mega projects. In our opinion, there is good chance of higher excise duty for cigarette makers. Historically, the government increased sin taxes for the tobacco sector in eight out of the past eleven years.

Positive on banks, construction, property.
Among the heavyweights on the index, the banking sector is trading at relatively low PE
multiples with

1. Public Bank (TP: RM11.10),
2. AMMB (TP: RM5.20),
3. Hong Leong Bank (TP: RM8.00) and
4. CIMB (TP: RM12.10)

trading at 12-13x forward earnings while the KLCI is at historical average levels of 15x earnings (and 1.7x book).
We also remain optimistic on the construction sector and expect upside for share prices for select
stocks as projects are awarded over the next 12 months. Our picks are

1. IJM Corp (TP: RM7.00) and
2. Gamuda (TP: RM4.25).

For property, we expect positive newsflow and potential upside in margins in the sector to lift valuations. We like large cap sector leader

1. SP Setia (TP: RM5.00) and niche developers
2. E&O (TP: RM2.10) and
3. DNP (TP: RM2.60).

We remain contrarians on large cap laggard MISC (Buy; TP: RM9.60).

HwangDBS Large Cap Buys










HwangDBS Small-mid Cap Buys

Will Hari Raya Rally Continues This Week

With FBM KLCI closing at last Friday on 1,208 most of us will think will the Hari Raya rally continues this week? Most of the big fund if they want to cash out for Raya bonus should done it by last week due to they need time to cash out from bank so likely they will cash out from market in this week so Market will supported. However Hari Raya is just around the corner so activity in share market may likely to slow down so market may likely to maintained.

For me it will unlikely the market to drop below 1,200 point by this week.

Will FBM-KLCI Form A Second Time W Patten?

Since beginning of March 09 bull rally, FBM-KLCI form a W patten before jump more higher to 1190 level, however during that time KLCI 100 index also change to FBM-KLCI which only count base on 30 share and this W patten form in a month time. Now look like FBM-KLCI is also forming a second W patten but will the index jump high again?

I think likely the index will jump up again after forming a double bottom or W patten but the level will not been that high like the first W patten and likely will drop back if the index hits 1200 level due to doubt about the sustainability of global economic recovery. Due to the same reason investors may seek refuge in gold by changing they investment in share into gold.


















By yesterday US gold futures hit a six-month high of US$1,000 (RM3,500) and spot gold also rose to six-month high yesterday as the dollar’s weakness, concerns about the sustainability of the global economic recovery and worries about inflation underpinned sentiment. Along with currencies, analysts were watching stock markets to gauge gold’s direction. A sell-off in equities on concerns about the economy could boost gold’s safe-haven appeal.

More Down Side FBM-KLCI Will Go

They are some bad and good news flow out since begin month of August but in Asia especially Shanghai Index had continues drop and above 20.5% correction. For Malaysia FBM-KLCI, the index still hold above support line 1150 and I think more down side will go due to base on the chart I did not see any bounds up sign yet.

Now most of the fund manager is cashing out their profit from share market and I think they not done yet. However share sure will bounds and correction. I think when FBM-KLCI drop below 1150 we can start buy in some good quality share due to the economic is on the way of recovery so the share will bull run again by year end.

Now share market is correction and now gold market is about to start again it bull run to hits USD1,000 per oz.

For more Gold Investment Info click here...

FBM KLCI Close At Red Sea

Today out of 30 share only 2 share keep out from the red. FBM-KLCI drop almost 20 point along with Asia market drop. The index had moving up for some time already and now is the time to do some correction.

Over all the market is recovery so for me I will buy in into the market in ever big drop like today. After this drop I think FBM-KLCI will go side way for this month of August due to it is a month of "Puasa" so usually share will move higher during Hari Raya.

Asia Market Likely To Technical Correction On This Week

Asia market had going up since begin of April till now without a technical correction only move sideways during early of July before countinuen move up, same thing happen to Malaysia share market.

As most of us know the economic crisis is over and now is on the way to recovery process, I see warrant market is bound up strongly since last week and myself had invest into AMMB-CD and IOICRP-CJ to hope get fast profit. Warrant is a good tool to make money when market is go up with investor comfident level is high, however how the market bound up strongly it still need to correction so ever correction is a oppocunity to buy in. H1N1 still is the risk in investing into market now.

FBM-KLCI Is About To Celebrate Its "Full Moon"

About a month since the FBM-KLCI start take effect, KLCI index has going up about 100 point due to the new calculation base on 30 share.

According to bloomberg, FBM KLCI is now priced at a price earnings ratio (PER) of 20.5 times. As the number suggests, it looks surprisingly more expensive than Hong Kong's 42-member Hang Seng Index at 18.5 times, and Singapore's 30 member Straits Times Index (STI) at 16.2 times.Is our stock market really more expensive than that of Hong Kong and Singapore, where trading activities are more vibrant?

I think the answer is yes because FBM KLCI's 30 constituents said to account for more than 60% of the Main Board's market capitalization, have government linked companies (GLCs) that are tightly held by government institutions. When a stock is tightly held, it is likely that its valuations are well supported and hence it becomes expensive.

Now government is easy to control the index and with the new launch Amanan Saham 1Malaysia sure will help government funding to continues to support the KLCI index and share market. I think to be save at all, invest into FBM-KLCI 30 constituents will be more sure profitable.

Economic Fundamentals Is Not Sure But Share Market Confident Is Back

I'm not sure economic fundamentals is good or not but what I sure is share market confident is strong due to KLCI index is supported strongly. One thing surprise me is that they are still people did not know KLCI now is caculated by 30 share and banking system & plantation top 5 share will affect KLCI above 50%!

So I think most of the retail investor with regular invest base on KLCI index will see market is getting better and supported. Because of that if they buy in penny share so sure the share they buy drop to zero also unaffected KLCI index. Now market really full of confident, I think this time government is vary smart by change the KLSE index base on 30 share to get confident into the share market.










I think this time is a golden time to invest into all the FBM KLCI 30 share warrant. I prefer warrant from banking system, plantation and gaming like Genting because all this 3 sector will affected above 65% of KLCI index so if government need to keep support the index sure all this top 5 share will be well monitor and supported by all the fund they had ( like Valuecap, EPF and tabung haji) .

Related Articles:-

• FBM-KLCI Is Not The Same With KLCI Month Ago
• FTSE Bursa Malaysia KLCI Breakdown

FBM-KLCI drop together with all the Asia share market

Yesterday FBM-KLCI drop together with all the Asia share market due to the news Chinese media had reported that Industrial and Commercial Bank of China and China CONSTRUCTION Bank were capping their 2009 lending targets, a move that would slow down credit growth. Asian markets retreated on July 29, rattled by a 5% pullback of the Shanghai Composite Index on reports that China’s two biggest state-owned commercial banks were restricting their lending. This reason is use by fund manager to take profit and I think profit taking activity may continues because they need some cash for coming Hari Raya on Sept.

Beside share market, Gold price also affected, after trading in a tight range for a few days, gold broke lower yesterday. Selling came on the back of

1. Weak investment demand, and selling in the physical market;
   
2. Dollar strength, which pushed the greenback from just below USD1.4300 to as low as USD1.4130 yesterday.

The trigger for this rally in the dollar was a much weaker-than-expected US consumer confidence data reading (down m/m in July). After yesterday’s sharp fall, weak long positions could be hesitant to re-enter the market. Gold support is at USD932 and USD926, with resistance at USD949 and USD964.

Now the share market and gold market will drop, so for me I think it is a good time to enter this two investment tool.

Foreign Shareholding Still Low In The Market

FBM KLCI is continues to make new high for this year as close at 1,172 yesterday. The major contribution is from Banking and Plantation as this two sector already cover half of the index weight.

Compare with regional, Malaysia recovery is still low and ringgit weakens against most currencies only strengthened against the US dollar. All this is a sign of foreign investor still not choosing Malaysia as a investment target compare Singapore and Indonesian. Like our banking system, foreign investor had put back their money because of the crisis and now they have return but still low compare before the crisis. As at end June foreign shareholding in

1. BCHB is 33.2% ( increase from 32% as at Dec 2008)
2. Malayan Banking is 10.76% as at 17 July 2009
3. Public Bank is 24.9% ( drop from 33.1% a year earlier )
4. RHB Bank is 5.2%
5. AMMB Holdings parent of the AmBank is 28.4% as at March 2009 ( drop from 36.9% a year earlier )

Now is about to end July 2009 and only 5 months before we enter the year 2010 as a recovery year for the hold world, for Malaysia economic to move higher and for us as a retail investor to make more money government need to make sure the foreign investor to come back more to Malaysia and if it do FBM-KLCI may hits over 1,500 point in next year.

For me I think invest into Banking system and plantation share will make profit and if the share is too expensive try buy in they warrants. Till now foreign investor no yet fully enter into Malaysia market and if they do the index will fly high.

Plantation is not yet fully recovery

Banking system is about to fully recover

FTSE Bursa Malaysia KLCI Breakdown

This is the breakdown of KLCI 100 share on the weight in FBM-KLCI for better analysis reference before buy in any share.

The Reason Why KLCI Surges To Fresh Year High

Blue chips rallied in the morning session on July 21, sending the FBM KLCI to a fresh year high of 1,153.94, with Bursa among the best performers among key Asian markets. The reason behind Bursa Malaysia surges to fresh year high is mainly because it ware base on 30 share compare 100 share for old KLSE index.

FTSE Bursa Malaysia KLCI is made up of the 30 largest listed companies by market value, with at least a 15% free float and minimum 10% annual turnover of free-float shares.
























Analysis by sectors weightage

KLCI:

1. Banking 25.2%
2. Plantation 14.8%
3. Transport 11.1%
4. Utilities 9.5%
5. Telco 8.1%

FBM KLCI

1. Banking 33.7%
2. Plantation 18.7%
3. Utilities 11.2%
4. Gaming 9.9%
5. Telco 9.3%

In FBM KLCI just only 2 sector bank and plantation already cover 52% weightage so it mean to short KLCI high just only need to push up bank or plantation share.

Other than this, 10 counters which have a total over 70% KLCI weightage is:-

1. Commerce ( Najib Brother company) highest weightage 10.1%
2. Maybank
3. Public Bank
4. Sime
5. IOI
6. Genting (Gaming sector! sure make money share, but it is halal for Muslim to buy?)
   
7. Resorts
8. Axiata
9. Tenaga
10. MISC

For KLCI to fly high Malaysia government just need to make sure top 5 counters perform well so compare old KLCI the news system is mach more easy and in addition Commerce bring 10.1% weightage to KLCI so sure it will make the job more easy.

7 sectors not in FBM-KLCI is:-

1. Building materials
2. Construction
3. Hotels
4. Insurance
5. Property
6. Timber
7. Technology

so it also mean these 7 sector drop to bottom or zero manufacture ( worker no job ) will not affected KLCI index as long as your money keep in bank.

New technical analysis is needed to invest in KLCI, the old type invest skill by using KLCI a guide line may not complete to give a good picture about Malaysia economic so when you want to invest into the share market may need to analysis sector by sector.

Malaysia surely "boleh" Malaysia is using the concept is win the game by change the game rules follow what you want. Sure win.

Chartist S N Lock sees the bourse staging a U-shaped recovery

Chartist S N Lock, who gave a presentation titled "Right timing: What do the charts say about the market's direction", at the Edge-Personal Money Investment Forum on the Stock Market 2009, is forecasting the FBM KLCI to rebound to 1,163 to 1,248 point this year. He sees the bourse staging a U-shaped recovery.

During the forum, Chartist had highlight that the index will try to retest a double bottom after rebounding to targeted 1,162 point, although the secound bottom is more likely to surface next year rather than this year. At Friday KLCI close at 1108.08 and just 54 point before the bull run turn around base on Chartist forecasting so if this true we still have 5 months to invest safely in KLCI.

Technical Analyst, SN Lock shares his take on what the charts show of the markets direction and where it may possibly head in the near future.


However base on the action plan taken by government a round the world and included Malaysia, the economic is making a U-shaped recovery in this year 2009 and likely to maintenance the bound up in year 2010 before a bull run start in year 2011 of a fully recovery. Thing may chance after a crisis as we had see economic Malaysia before and after 1997/1998 crisis, so US and China will be difference after this crisis. To continues to make profit in share after this crisis technical analysis also will need to change.

Chartist S N Lock at the forum also adds that the numerical cycles of the index over the last 32 years have shown that the index tends to close higher in the years ending with the numbers 1, 3, 6 and 9.

Related Articles:-

• Malaysia Set For U-Shaped Recovery?

FBM-KLCI Is Not The Same With KLCI Month Ago

Yesterday KLCI hits year 2009 new high above 1,100 point before close at 1,097. However one thing we need to keep in mind that now KLCI index is not the same KLCI index last month ago because the new FBM-KLCI is base on 30 solid company and controllable by government.

Majority share in FBM-KLCI is banking and plantation that government can control by using Bank Negara and CPO price. The real economic in Malaysia did not fully review in FBM-KLCI so using FBM-KLCI to analysis need to add in sector by sector index to get a real picture.

All 30 share in FBM-KLCI had some small but no vary small share hold by EPF, Tabung Haji and government investment company like Valuecap and Kazanah so government had a better control on the index. Did you know why TopGlov not on the list? Everyone know TopGlov is making money business but not like to been control due to they business did not need government to back up.

However, Asia economic is getting better and the business target on local and China market will be profitable so invest carefully on share market by analysis the natural of the business of the share you buy.

Malaysia Set For U-Shaped Recovery?

The global economy is not quite out of the woods, but the good news is the worst is over. Backdrop of improving global economic data, Asia is expected to recover faster than the industrialized world.
They are some research house project a V-shaped recovery for Asia and I think V-shaped recovery likely to happen on China and India but for Malaysia, U-shaped is likely to happen after China and India recovery from crisis.

China and Singapore are among the top trading partners of Malaysia, the expansion in their PMI (Purchasing Managers Index) will spur demand for Malaysia's manufactured goods so with a V-shaped recovery from their, Malaysia will recover U-shaped. Be that as it may, domestic demand will still be the driver of Malaysia's gross domestic product (GDP) growth in the months ahead. Malaysia economy is expected to grow +1.3% in 4Q2009, but not enough to prevent the economy from contracting -3% this year before growing at +3.5% in 2010 said by CIMB

Going forward, the performance of the Malaysia economy hinges on political stability and a continued pace of economic reform to make the country competitive and attractive location for foreign investors. History has shown that economies that slip into a deep recession will rebound just as sharply as was the case in 1998 when the Malaysia economy contracted 8% and bounced back 5.4% in 1999, with the last quarter growing 10.6% y-o-y.

U-shaped recovery can still happen in Malaysia for several factors

1. Asia now has China and India ( and to a certain extent Indonesia) to offset slackening export demand from Europe and US.
2. Asian governments have all put in place aggressive stimulus packages which are beginning to take effect.
3. Asian policymakers have begun to focus on boosting domestic demand since 1998 and last but not least, the developed world is already showing signs of recovery, thanks to aggressive fiscal stimulus actions.
   

KLCI Volume Drop Each Day

KLCI volume is drop each daya since KLCI hits 1090 level, situation likely to continue in this week due to most of the investor will see what is the outcome from G8.