KLOFFE'S KLSE CI Futures Weekly Market Commentary

MARKET MOVEMENT

The Kuala Lumpur Composite Index Futures (FKLI) was traded from a low of 697.5 to a high of 748.0, a difference of 50.5 index points. The week started off lower due to the concern of weakening ringgit and statement made by Deputy Prime Minister Datuk Seri Anwar Ibrahim on revision of growth forecast. On Monday, the March futures contract resided at the low 700s level. Surprisingly, 33 contracts of June futures was traded on that day with all position opened.

The requotation of Sime Darby stock sent March futures down to 699.0 on Wednesday morning but March futures rebounded when the reaction on requotation of Sime Darby was pretty impressive. The ringgit was stabled at 3.66 to 3.70 level which sent March futures seven points at premium on the day's close.

On Thursday, the futures market was once again traded at premium due to fresh talks of more mergers and acquisitions to come. The March futures ended at 743.5.

The futures weakened on Friday when profit taking tookpart late in the afternoon. However, the cash market closed up by 0.20 index points. The futures closed at a discount of 7.24 at 724.0. The ringgit closed at 3.6685 on Friday.

To recap, total contracts traded for the week were 10,225 contracts, an daily average of 2,045 contracts. The 20-day volatility stayed at 50% level, the lowest since beginning of this year. However, total open interest stayed above 13,000 level.

MARKET OUTLOOK

Next week, focus would be mainly concentrated on the the annoucement of economic measures by Deputy Prime Minister Datuk Seri Anwar Ibrahim.

For March futures, resistance would be at 740, 757, and 782 while support can be seen at 681, 706, 715 levels. I expect the market outlook to be bullish and high trading volume.

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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