Bursa Malaysia: KLCI Technical Analysis for 25 Aug & Market Forecast

Market Review for KLCI:

The FBM KLCI index gained 31.80 points or 2.08% on Tuesday. Finance Index increased 1.02% to 13815.29 points, Properties Index dropped 0.18% to 1072.84 points and Plantation Index down 0.13% to 6706.97 points. market traded within a range of 64.74 points between an intra-day high of 1568.42 and a low of 1503.68 during the session.

The KLCI rebounded from yesterday’s losses by ending higher at 1563.94 points despite overnight losses in Wall Street on deep fears about China's economic slowdown. Our local bourse advanced on bargain hunting.

FBMKLCI Day Performance

Open:1515.73

High: 1568.42

Low: 1503.68

Close: 1563.94

Change(Points): +31.80

% Change: +2.08%

Volume: 2,784.4

Rise: 381

Fall: 487

Unch: 935

Market forecast for KLCI:

KLCI is expected to trade with positive sentiments as technically it have shown bullish engulfing pattern and it have also crossed the immediate resistance at 1555 however,the internal political issue can keep the investor sentiments cautious.

KLCI COUNTER SPECIFIC NEWS :

• Malaysian Resources Corp Bhd's (MRCB) net profit for the second quarter ended June 30, 2015 almost halved to RM60.10 million from RM118.53 million a year ago due to higher expenses and lower profit from operations.
• Uzma Bhd ( Financial Dashboard) rose 3.16% early today after the company reported 2Q core net profit of RM11.9 million bringing 1H15 core net profit to RM25.1 million.
• Plantations-to-motoring conglomerate Sime Darby Bhd said it is weighing options to strengthen its balance sheet after its acquisition of New Britain Palm Oil (NBPO).
• Boustead Holdings Bhd's second quarter net profit ended June 30, 2015 dropped 25% to RM50.8 million, from RM67.7 million a year ago, largely due to the decline in its palm products and fuel-trading revenue.
• Malaysian Pacific Industries Bhd (MPI) ( Financial Dashboard) fell in early today amidst thin trade after AffinHwang Capital Research downgraded MPI to Sell at RM6.42 with a lower target price of RM4.31 (from RM6.24) and said MPI reported a stronger-than-expected set of FY15 earnings.
• Real estate investment firm Pelaburan Hartanah Bhd (PHB) is buying a parcel of commercial land measuring 10.8 acres in Kuala Terengganu for RM106 million to embark on a mixed development project.
• Felda Global Ventures Holdings Bhd’s (FGV) second quarter net profit ended June 30 2015 was down by half on higher cost of sales and lower earnings mainly from palm related segments.

GLOBAL FACTORS AND WORLD INDICES:

• Asian shares tumbled today after a big decline in Chinese stocks sparked a global equities rout and increased the fear over the future outlook of the world economy. Shanghai stocks tumbled 6.41 per cent at the open, in line with the decline of previous day.
•  Hong Kong stocks fell 0.67 % in early trade Tuesday, in line with fall in all other gobal indexes.Index fall by 142.86 points to 21,108.71 in opening deals.
• China's major stock indexes further dropped by 6% in early trade on Tuesday, continuing the decline of Monday that made Chinese exchanges suffer and destablised the world financial market around the world. This was the biggest loss that China saw after the Global financial crises 2008.
• Australian shares rebounded on Tuesday as investor took the advantage of beaten down bank stocks, on the next day where the market has seen the biggest drop in over the 6 years. S&P/ASX 200 i.e., 4.1% drop.
• European stocks rebounded at opening on Tuesday despite of fall in Chinese indexes. Europe’s various indexes saw recovering the previous day fall, London's FTSE-100 rose by 1.3 per cent, Frankfurt rose by 1 1.74 per cent and Paris's CAC-40 opened the day up 1.7 per cent.
• US 10-year Treasury yields declined below 2 per cent. This was seen for the first time since April, as high sell-off in stocks and commodities encouraged investor to go for the safest fixed-income assets. US government securities increased consecutively on fourth day between the concern over slowing growth in China and destabilisng the economy all over the world and has also led to delay in increase in US ineterst rate by the Federal Reserve.
• Gold was traded below a 7 week high on Tuesday as equity markets regained from continous fall also US Dollar rebounded after a high sell-off during past few trading sesisons due to fear over meltdown of Chinese economy.
• Oil declined and was traded near 6 year low after equities market and commodities saw huge selloff.

Bursa Malaysia : KLCI Technical Reports for Week Ahead

Weekly wrap of KLCI: This week the FBM KLCI index given a range bound movement and traded between the resistance level of 1595 and support level of 1550, on weekly basis the index have made a high of 1594.68 and low of 1557.1 and ended with a weekly loss of -1.38%.  

FBMKLCI Week's Performance
Open	1563.65
High	1583.38
Low	1557.01
Close	1574.67
Change (Points)	-22.15
% Change	-1.38%

On Friday the KLCI ended flat with 2.74 points lower and closed at 1574.67 points amid overnight losses in US market. The performance of our local bourse was in line with our regional peers on concern that global growth is slowing. On sectoral basis The Finance Index fell 0.77% to 14132.32 points, Properties Index dropped 0.51% to 1103.5 points and Plantation Index rose 0.28% to 6869.39 points in the last trading day of the week. The market traded within a range of 26.37 points between an intra-day high of 1583.38 and a low of 1557.01 during the session on Friday.

Market Forecast for week ahead: The KLCI index is expected to take sideways trend next week as the investors sentiments are still defensive about the market condition which can bound the index to give some good movement, however if it breaks the support of 1550 then it can drop further and can reach to the level of 1500 and extend the last three weeks heavy sell down. 

Support 1	Support 2	Support 3	Resistance 1	Resistance 2	Resistance 3
1550	1500	1465	1595	1630	1672

 Technical indicators: RSI for this week is 21.893 with CCI at -200.639. Besides, difference line of MACD -44.093 performed below its signal line -27.451.

Global factors and World Indices

• Ringgit weakened to a 17-year low and led declines in Asia as falling oil prices worsened Malaysia's export outlook amid an emerging-market selloff. The currency has slumped 8.2 per cent this month in the worst developing-nation performance after Russia's ruble. Figures due Friday may show a further decline in Malaysia's foreign-exchange reserves, reducing the central bank's ability to stem the ringgit's descent.
• Malaysia's attorney-general has formed a new task force to investigate state fund 1MDB but it excludes the country's anti-corruption body.
• China's yuan was broadly unchanged on Friday and looked to close out the week on a flat note as the central bank sought to stabilise the currency and calm financial markets after its shock devaluation last week.
• Tokyo's benchmark stock index dropped 2.98 per cent on Friday, piling on its fourth day of losses as fears about the health of the global economy pounded equity markets. Nikkei 225 at the Tokyo Stock Exchange tumbled 597.69 points to finish at 19,435.83, its lowest close in just over three months.
• Asian stocks tumbled, extending the worst week for global equities in nine months, as a gauge of Chinese manufacturing plunged to the lowest since 2009. Gold extended gains.
• Ringgit weakened to a 17-year low and led declines in Asia as falling oil prices worsened Malaysia's export outlook amid an emerging-market selloff. The currency has slumped 8.2 per cent this month in the worst developing-nation performance after Russia's ruble. Figures due Friday may show a further decline in Malaysia's foreign-exchange reserves, reducing the central bank's ability to stem the ringgit's descent.
• Federal Reserve officials planning to lift interest rates as soon as September have been encouraged by solid US jobs growth, but inflation holds the key to how far the Fed can go in moving rates away from zero.
• Markit's flash composite Purchasing Managers' Index (PMI), which tracks manufacturing and services activity that accounts for more than two-thirds of the economy, inched up to 54.0 from 53.7 in July. Stronger-than-expected growth among manufacturers helped Germany's private sector expand at a faster rate in August, suggesting Europe's largest economy is on track for a solid third quarter.
• Euro zone business growth unexpectedly accelerated this month as steeper price cutting drove an increase in new orders and led to firms building up a bigger backlog of work, a survey showed on Friday.
• Gold for immediate delivery climbed 1.4 per cent to US$1,168.39 an ounce, the highest level since July 7, before trading at US$1,163.36 by 12:22 pm in Singapore, according to Bloomberg generic pricing. The metal has surged 4.3 per cent this week and is set for the biggest such gain since January.
• Oil prices resumed their downward trend on Friday pulled lower by weaker global stock markets and a sharp contraction in China's manufacturing activity, with the US benchmark on track for its longest weekly losing streak since 1986.