KLOFFE'S KLSE CI Futures Weekly Market Commentary

MARKET MOVEMENT

The Kuala Lumpur Composite Index Futures (FKLI) was traded from a low of 587.0 to a high of 624.0, a different of 37.0 index points. The week started off bearish as investors were concerned about the performance of underlying stocks and weak sentiments on regional bourses. However, April Futures rallied to close at 615.5 on Monday as investors anticipated tighter basis between cash and futures market.

The April futures continued to trade at almost 35 points discount as investors saw cash market plummeted 10 points on Tuesday. The futures settled at 590.0 with 4,504 contracted change hand.

On Wednesday, the futures market was charged by roll-over activities and the volume of the day was as high as 7,464 contracts transacted. April Futures closed at 600.0, up 10 points which tighten the gap of cash and futures market by 19.67 index points.

On Thursday and Friday, the futures market continued its uptrend as RHB-Sime Bank deal was considered successful and transparent. The only surprise in the market - Phileo Allied Bank was invloved in the deal by purchasing RM 1 billion preference shares. The FKLI April Futures closed the week at 617.0, a discount of 18.11 index points.

To recap, total contracts traded for the week were 26,973 contracts, an daily average of 5,395 contracts. The 20-day volatility stayed at mid 30-40% level. Total open interest stayed above 25,000 level, the highest recorded level. The high volume week was a result of roll over activities and reaction of RHB-Sime Bank deal. Both April and May futures were extremely active with 16,663 and 10,310 contracts traded.

MARKET OUTLOOK

The market is likely to remain neutral to bearish. However, April futures would have some uptrend to close up the distance of huge discounts.

For April futures, resistance would be at 624, 631, and 645 while support can be seen at 589, 603, 610 levels. I expect the market outlook to be neutral and more liquidity are expected in this coming three days as RHB and RHBCap will resume trading on Monday and April Futures will expire on Thursday.

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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