KLOFFE'S KLSE CI FUTURES(FKLI)
WEEKLY MARKET COMMENTARY

April 10, 1998

Volume and Open Interest (1 year window)wpe14.jpg (17050 bytes)

Daily Price Movements (20 day window)wpe15.jpg (17473 bytes)



MARKET MOVEMENT

The Kuala Lumpur Composite Index  Futures (FKLI) was traded from a high of 661.4.5 and a low of 635.0, a different of 26.4 index points. The week started off slow as investors were concerned about the performance of underlying stocks and weak sentiments on regional bourses.  On Monday, the April futures contract resided at the 652.5 level.

After a one-day break of Muslim holiday, the futures market experienced a massive selling activities at 652.5 as 2,588 contracts were transacted on that price alone. Surprisingly, with a huge block at 652.5, the heavy selling activities were still well absorbed as arbitrageurs, speculators and hedgers played their role accordingly. With the futures market pathing through the maturity stage, the highest record daily volume was achieved at 7,509 contracts being transacted.  

With the week low of 635.0  recorded on Wednesday, investors started to bargain hunt as the futures started rallying to a week high of 661.4 on Thursday. The movementsl of ringgit was not affecting the futures prices this week as April futures was already trading at a huge 23 points discount.

On Friday, the futures market was quiet in response to the Good Friday holiday in foreign market. The FKLI April Futures closed the week at 650.0.

To recap,  total contracts traded for the week were 14,066 contracts, an daily average of 3,517 contracts. The 20-day volatility dropped to  mid 30% level. Total open interest stayed above 16,000 level.

MARKET OUTLOOK

The market is likely to remain bearish. However, if the cash market is stagnanted at the same level, probably the futures market would shorten the distance of huge discount.

For April futures, resistance would be at 660, 672, and 690 while support can be seen at 608, 632, 642 levels.  I expect the market outlook to be neutral to bearish and more activities and liquidity are expected in the coming week.




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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