Volume and Open Interest (1
year window) Daily Price Movements (30 day window) |
KLOFFE'S KLSE CI FUTURES(FKLI)
WEEKLY MARKET COMMENTARY
July 16, 1999
Volume and Open Interest (1
year window) Daily Price Movements (30 day window) |
THE CONVERGENCE OF HIGH PREMIUM FUTURES
| MARKET MOVEMENT The Kuala Lumpur Composite Index Futures (FKLI) was traded from a high of 896 to a low of 849.5, a different of 46.5 index points. The bearish sentiment and lack of activities in the futures market are mainly caused by the huge premiums compared with cash market. The 35 premium managed to narrow to just 15.38 index points in the week. Investors shy away from trading futures when second, third liners are making a rally in the stock market. This has brought them better profits as investors need not pay any outlay with "T+5" settlement whereas margins need to be presented for trading futures. Furthermore, the 20-day volatility level of underlying stocks are higher than futures since last week. This might suggest the quietness of futures trading. The cash market consolidated as investors started to take profit ahead of any uncertainties. Second, third liners and second board stocks remained the focus of investors. For July futures, it settled at 858.5 and August futures settled at 878.8 To recap, total contracts traded for the week were 6,229 contracts, an daily average of 1,246 contracts.The 20-day volatility stayed below 30% level. Total month end open interest stayed above 5,000 contracts. |
MARKET OUTLOOK The market is expected to be neutral with premium ranging from 5-15 index points for next week as July futures will expired in 10 trading days. The direction of futures market will be based on the movements of equity market and the activeness of component stocks.
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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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