KLOFFE'S KLSE CI Futures Weekly Market Commentary

MARKET MOVEMENT

The Kuala Lumpur Composite Index Futures (FKLI) was traded from a low of 663.1 to a high of 722.0, a difference of 58.9 index points. The week started off lower due to the concern of weakening ringgit. On Monday, the ringgit was trading at 4.05-4.10 level while the March futures contract resided at the 680s level.

However, positive notes that made by both Finance Minister Answer Ibrahim and Economic Advisor Tun Daim Zainuddin helped push both cash and futures market above 700s level on Tuesday and Wednesday.The ringgit stabled at 3.80s.

On Thursday, the futures market was once again traded at discount due to profit taking and lack of direction. The March futures ended at 692.0.

The futures soared on Friday when the Securities Commission announced on the relaxation of foreign broker rules. This helped pushed the futures at premium compared to the cash market which settled at 708.16. The futures market closed at 712.0, a last 5 minutes pushed up of 7 index points.

To recap, total contracts traded for the week were 9,996 contracts, an daily average of 1,999 contracts. The thin volume reflected the lack of direction on the cash and futures market and furthermore, the 20-day volatility stayed at 50% level, the lowest since beginning of this year. However, total open interest stayed above 12,000 level.

MARKET OUTLOOK

Next week's cash and futures market are mostly likely to focus on Sime Bank/RHB deal and posibble resume trading on the three heavyweights : Sime Darby, RHB and RHBCap. Concerns over Taiwanese Investment plan and local corporate earnings would continue to dominate the market. Meanwhile, Renong's net loss result might also bring some bad sentiment to the market.

On the technical side, there's a triangle pattern shown on the analysis and once the pattern breaks the resistance or support, the trend would be much more clearer.

For March futures, resistance would be at 719, 726, and 747 while support can be seen at 663, 684, 698 levels. With the daily and weekly charts showing a down trend signal , I expect the market outlook to be bearish.

DISCLAIMER
The weekly market commentary has been compiled by Shu, Meng Chan (article writer) for private views only. The weekly market commentary articles are being released for the interest of Shu, Meng Chan only and should not be considered investment advice. There is no warranty or representation expressed or implied by Shu, Meng Chan as to the the accuracy or completeness of the commentary herein. The content of the articles will not reflect the general view point of the described (KLOFFE)Futures Exchange. Shu, Meng Chan will not be liable for any action taken by viewers upon reading Shu's Corner KLOFFE's Weekly Market Commentary.

(mshu@tm.net.my)
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