Expected BNM to start raising rates as soon as its next policy meeting on 4 March.

latest monetary policy statement on Jan 26, Bank Negara Malaysia (BNM) kept the Overnight Policy Rate (OPR) unchanged at 2%, as widely expected, and reiterated the “appropriateness” of the current monetary policy stance against the backdrop of re-emerging inflation. Before the BNM keep the OPR rate unchanged FBM KLCI already drop due to the news siding OPR rate will move up.

With this news big fund manager drop the price to make panic selling and now KLCI is in distribution stage and soon will be in mark down stage. However the mark down stage may likely happen at last Friday closing if today FBM KLCI bound up a bit with vol. If OPR rate is true to raise on March so FBM KLCI will not go up back to 1,300 level by end of 1Q2010.

Base on the chart FBM KLCI is going down the hill and may bottom around 1,000 level before any move up momentum rally back to 1,300 level due to when stimulation package pull back by goverment and raising of OPR will put back Malaysia economic back to the true support level.

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