KLOFFE'S KLSE CI Futures Weekly Market Commentary

MARKET MOVEMENT

The Kuala Lumpur Composite Index Futures (FKLI) was traded from a low of 533.2 to a high of 595.0, a different of 61.8 index points. The direction of the market was largely influenced by the developments in Indonesia.

With a huge discount, the May futures stayed at negative territory on Monday. The futures settled at 539.3 with 4,369 contracts transacted.

On Tuesday, the Indonesia Crisis began to clear up after President Suharto announced plans to call for a new election in 6 months in which he would not run for re-election. At 5pm the same day, the announcement of settling NPL by setting up national Asset Management Company (AMC) helped boost the market as players started speculating the favourable announcement. The May futures soared to 551.0 with turnover of 4,856.

The announcement of Suharto's resignation helped pushed both cash and futures market further on Wednesday and Thursday as May futures rallied to a high of 594 on Thursday. It settled at 591.0 on Thursday with 7,165 contracts traded.

On Friday, the futures market closed low at 564.0 due to poor corporate reports and profit taking activities. It widened the basis at close to 13.69 points.

To recap, total contracts traded for the week were 27,806 contracts, an daily average of above 5,500 contracts. The 20-day volatility stayed above 50% level. Total open interest jumped above 26,000 level.

MARKET OUTLOOK

The market is likely to remain volatile with high liquidity. For May futures, resistance would be at 638, 606, and 585 while support can be seen at 510, 542, 553 levels.

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.

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