KLOFFE'S KLSE CI Futures Weekly Market Commentary

MARKET MOVEMENT

The Kuala Lumpur Composite Index Futures (FKLI) was traded from a high of 420.0 to a low of 379.7, a different of 41.3 index points. The direction of the market was largely influenced by the downgrades of Malaysian stocks by rating agencies' .

Both cash and futures broke 400 psychological support for the first time this week. Hpwever, both cash and futures were able to maintain above 400 level on Friday.

Roll over activites were slow on the last 5 business day of the month as investor tend to cash settled July futures on expiration. Ringgit stabled at 4.15 on Friday.

July futures expired at 401.9, a discount of less than 1 index points compared to the underlying of 402.65. August futures closed at 401, a discount of 1.65 index points

To recap, total contracts traded for the week were 19,351 contracts, an daily average of 3,870 contracts. The 20-day volatility stayed above 40% level. Total open interest stayed above 14,000.

MARKET OUTLOOK

Based on technical analysis, the market is likely to be bullish as it broke the bearish down trend.

Fundamentally, Bank Negara Malaysia announced on Friday that it will cut interest rates to free more money to the market to ease credit crunch in which would help both cash and futures market to be bullish next week.

Resistance would be at 430, 415, and 408 while support can be seen at 395, 388, 380 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.

(mshu@tm.net.my)
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