R H B IN V E S T M E N T M A N A G E M E N T S D N . B H D . (1 7 4 5 8 8 -X )
Weekly Newsletter – Malaysia Market
For Week ended 21/08/2009
Market Review For the week, the FBM KLCI declined 2.1% to 1,163.79 before the weekend, compared to 1,188.57 a week ago. Local bourse was in the correction mode over the past week as interests remain subdued on lack of strong catalysts. The market needs to start getting some positive news to lift the market out of present state to avoid a prolonged downward correction. Crude oil settled up by 7.4% at USD72/barrel closing for the week compared to last week’s closing of USD67/barrel as data in the US promised economic recovery and a potential revival in energy demand, according to Reuters. The weaker palm oil export data has resulted in the CPO price to close lower at RM2,407.5/tonne, down 3.4% for the week. CPO futures also expected to be rangebound trade on Bursa Malaysia Derivatives next week on investors concerns over the slowdown in the commodities exports. The ringgit closed firmer against the US dollar as investors regained their appetite for risk following gains in global markets. The ringgit is taking advantage of the weakening greenback amid buoyant outlook for the global economy recovery, thus eroding the safe-haven demand for the US currency. Ringgit closed at RM3.51/USD, increased by 0.2% WoW. Plantation Spot Palm Oil (RM/tonne) Generic Palm Oil futures (RM/tonne) Oil & gas West Texas Intermediate (WTI) Cushing Crude Oil Brent Crude Index (ICE) Generic Crude Oil futures Singapore 97 Octane gasoline FOB spot carge price Jet Kerosene Malaysian RON97 petrol price (market) Currency Ringgit to USD Ringgit to JPY JPY to USD Transportation Baltic Dry Index Steel CRB Commodities Index Regional bourse performance DJIA FUT e-CBOT Sep09 DOW JONES INDUS. AVG HANG SENG INDEX JAKARTA COMPOSITE INDEX KOSPI INDEX FTSE Bursa Malaysia KLCI NASDAQ COMPOSITE INDEX NIKKEI 225 PSEi - PHILIPPINE SE IDX S&P 500 INDEX STOCK EXCH OF THAI INDEX STRAITS TIMES INDEX TAIWAN TAIEX INDEX TOPIX INDEX (TOKYO)
Price Last 2,407.50
1 day ago 3 days ago 5 days ago 1 month ago 3 month ago 2,406.50 2,429.00 2,509.50 2,189.50 2,744.50
% Change 1D 0.04
1W (4.06)
1M 9.96
3M (12.28)
MTD 5.59
YTD 47.70
2,380.00
2,340.00
2,420.00
2,500.00
2,180.00
2,595.00
1.71
(4.80)
9.17
(8.29)
4.66
41.25
72.54 72.57 74.27
72.42 71.00 73.33
66.75 72.22 72.37
70.52 72.45 72.41
63.98 64.17 66.87
61.44 58.77 59.93
0.17 2.21 1.28
2.86 0.17 2.57
13.38 13.09 11.07
18.07 23.48 23.93
4.45 5.83 3.58
62.65 83.58 62.91
85.15 84.85 82.80 78.65 79.85 76.75 Estimated Price Govt price Change (%)
88.05 79.40
76.05 74.55
78.30 65.55
0.35 (1.50)
(3.29) (0.94)
11.97 5.50
8.75 19.98
1.73 4.38
93.74 45.24
1.64
1.80
(0.09)
3.52 3.75 93.84
3.53 3.74 94.20
3.54 3.74 94.69
3.52 3.71 94.94
3.54 3.78 93.75
3.53 3.74 94.41
0.23 (0.15) 0.38
(0.04) (1.20) 1.17
0.64 0.74 (0.10)
0.40 (0.22) 0.61
0.09 (0.81) 0.90
(1.48) 1.55 (3.41)
2,534.00
2,614.00
2,774.00
2,685.00
3,511.00
2,665.00
(3.06)
(5.62)
(27.83)
(4.92)
(24.36)
227.39
378.65
378.20
385.09
384.59
363.82
354.77
0.12
(1.54)
4.08
6.73
1.89
20.18
9,320.00 9,279.16 20,328.9 2,328.6 1,576.4 1,163.4 1,969.24 10,383.4 2,760.9 996.46 641.0 2,559.6 6,733.2 958.6
9,207.00 9,135.34 20,306.3 2,337.0 1,550.2 1,164.4 1,930.84 10,285.0 2,771.2 979.73 640.3 2,567.7 6,789.8 949.7
9,321.00 9,398.19 20,893.3 2,396.5 1,591.4 1,188.6 2,009.35 10,597.3 2,856.1 1,012.73 654.3 2,631.5 7,069.5 973.6
8,886.00 8,915.94 19,501.7 2,146.6 1,489.0 1,134.7 1,916.20 9,652.0 2,593.5 954.58 609.8 2,454.3 6,953.3 901.6
8,234.00 8,292.13 17,199.5 1,885.7 1,421.7 1,035.6 1,695.25 9,264.2 2,333.8 888.33 548.8 2,211.0 6,718.8 881.4
0.39 0.76 (0.64) 0.23 0.29 0.03 1.01 (1.40) (1.47) 1.09 0.57 (0.57) (1.16) (1.17)
0.38 (0.51) (3.32) (2.61) (0.66) (2.08) (1.00) (3.39) (4.76) (0.53) (1.47) (3.29) (5.87) (2.69)
5.29 4.87 3.58 8.73 6.18 2.56 3.81 6.07 4.88 5.53 5.71 3.69 (4.29) 5.08
13.63 12.76 17.44 23.77 11.21 12.38 17.34 10.51 16.56 13.40 17.47 15.10 (0.95) 7.48
2.52 1.95 (1.82) 0.46 1.52 (0.95) 0.54 (1.15) (2.79) 2.01 3.31 (4.30) (5.98) (0.31)
8.50 6.54 40.39 72.19 40.60 32.74 26.14 15.56 45.24 11.53 43.26 44.47 44.95 10.25
9356.00 9350.05 20199.02 2333.90 1580.98 1163.79 1989.22 10238.20 2720.18 1007.37 644.63 2544.86 6654.80 947.34
Source : Bloomberg, RHBIM
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R H B IN V E S T M E N T M A N A G E M E N T S D N . B H D . (1 7 4 5 8 8 -X )
Notable events during the week Proton Holdings net profit in the 1Q to June 30 2009 rose marginally to RM54.55 mil from RM52.03 mil a year ago despite the slightly lower sales volume. Group revenue increased 8% to RM1.85 bil from RM1.71 bil. The results were above expectation. Sales value in the manufacturing sector in June fell 25.5%, or RM13.5bil, to RM39.3bil compared with RM52.7bil reported in the same month last year. However, the sales value grew 6.7% (RM2.46bil) from May’s RM36.8bil (revised figure). Malaysia’s CPI declined 2.4% y-o-y in July, in line with economists’ consensus estimates. The decline was due to the high base effect from last year’s fuel price hike, the Statistics Department said yesterday. Toll highway operator PLUS Expressways net profit rose 5.7% to RM281.32mil for the second quarter ended June 30 compared with the previous corresponding period on higher toll revenue and lower operating costs. Its revenue increased 4.6% to RM72.24mil. The results were within expectation. Excluding RM8.5mil exceptional loss from the disposal of vessels, MISC adjusted 1QFYE03/10 net profit of RM241.9mil came in within expectation. The liner division remained in the red with RM314.6mil losses during the quarter on the back of the triple-whammy of falling volumes and freight rates, but rising operating cost.
Market Outlook FBM KLCI started out the week on a soft platform in the wake of profit-taking activities due to easier overnight Wall Street and commodity prices performances throughout the week. The local bourse also staged a technical recovery on bargain hunting interest, riding on the strength of offshore performance to close higher in the middle of the week. After the recent surge on the local bourse, the FBM KLCI naturally retreats with investors moved to the sidelines. Elsewhere, weekly technical measurements were seen softening. The beginning of the fasting month which coincided with the beginning of the school semester break will add up to the lack of fresh local market-moving factors. It is anticipated that the market will trade rangebound this week. Market outlook will partly taking its cue form the overnight Wall Street performance. Barring fresh developments, we expect that FBM KLCI to hover around current levels, with resistance capped at the 1,190 points level in the immediate term.
Investment Tactics & Strategy Whilst our equity asset allocation remained at above 85%, we are taking opportunities to hike up our strategic allocation with the anticipated market weakness.. Our rationale of a higher asset allocation as we believe that at the current juncture the benchmark is building its base at the 1,150 to 1,160 area for the next market trajectory towards our next target of 1,250. Our sectors preference remain on the banking, building materials, construction and oil & gas segments, with the manufacturing sector for trade, tactically.
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R H B IN V E S T M E N T M A N A G E M E N T S D N . B H D . (1 7 4 5 8 8 -X )
Technical Outlook FBM KLCI: Negative expansion of the daily MACD against the daily trigger line and the mild peaking out pictogram of the weekly MACD suggest FBMKLCI may stay in correction mode in the immediate term. Support seen at 1,160 with the strong support at the 50d MA ie.. 1,120.
Source : Bloomberg
CHARTS FOR THE WEEK: Crude Palm Oil: Daily MACD is suggesting a correction with the price has broken the 100 days MA line at RM2,430. Price is expected to be well supported above RM2,300/mt in mid term ie. above the 50d MA line.
Source : Bloomberg
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R H B IN V E S T M E N T M A N A G E M E N T S D N . B H D . (1 7 4 5 8 8 -X )
Crude Oil: Further consolidation expected as MACD formed bearish death cross. Nevertheless, price is expected to be well supported at above USD67/barrel. Currently hovering at its YTD high of USD72/barrel. A breakout successfully at that level could spark a rally.
Source : Bloomberg
US Dollar against Malaysian Ringgit: Rangebound between RM3.50 to RM3.55 in the immediate term.
Source : Bloomberg
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R H B IN V E S T M E N T M A N A G E M E N T S D N . B H D . (1 7 4 5 8 8 -X )
List of KLCI FBM 30 Stocks SECTOR Automobiles UMW HLDG BHD
Last Price (RM)
% Change WoW YTD
FBMKLCI INDEX WEIGHT (%)
6.15
-1.91
19.42
1.44 1.44
Banking & Finance PUBLIC BANK BHD BUMIPUTRA-COMMER MALAYAN BANKING AMMB HLDG BHD HONG LEONG BANK RHB CAPITAL BHD
9.89 10.30 6.43 4.08 5.91 4.61
-0.70 -4.10 -2.58 -3.32 0.17 -1.91
14.94 76.07 40.39 65.18 15.88 18.21
9.98 10.53 9.75 2.38 1.07 0.57 34.26
Consumer PARKSON HOLDINGS
5.22
-1.51
31.16
0.77 0.77
Construction YTL CORP BHD
7.16
-1.24
1.56
1.75 1.75
6.23 2.75 4.31 14.96
1.47 -2.83 -0.69 -4.10
68.38 21.68 -3.39 12.48
4.93 2.31 1.25 0.86 9.34
Infrastructure PLUS EXPRESSWAYS
3.32
0.91
11.41
1.90 1.90
Media ASTRO ALL ASIA N
3.30
-0.60
49.32
0.73 0.73
Oil & Gas PETRONAS GAS BHD PETRONAS DAGANGA
9.90 8.55
1.02 -0.35
1.02 18.75
1.68 0.73 2.41
Plantations SIME DARBY IOI CORP BHD KUALA LUMPUR KEP PPB GROUP BERHAD
8.23 5.08 13.26 15.30
-2.26 -5.05 -5.15 0.66
58.27 42.70 48.99 64.52
10.57 6.80 2.02 2.59 21.98
8.00 2.13 2.35
-1.60 -1.39 -11.99
28.00 12.11 125.96
7.41 1.42 0.82 9.65
Telecommunications AXIATA GROUP BER TELEKOM MALAYSIA DIGI.COM BHD
3.08 3.05 22.10
3.08 -0.65 0.00
3.08 33.44 1.38
5.57 2.34 1.96 9.87
Tobacco & Liquor BRIT AMER TOBACC
44.36
-1.42
-0.31
1.81 1.81
8.64 2.93
-2.15 -4.87
1.05 -4.25
3.67 0.42 4.09
Gaming GENTING BHD GENTING MALAYSIA BHD BERJAYA SPORTS TANJONG PLC
Power TENAGA NASIONAL YTL POWER INTL MMC CORP BHD
Transportation MISC BHD MALAYSIAN AIRLIN
Source : Bloomberg
The Disclaimer: This document is prepared by RHB Investment Management Sdn Bhd (RHBIM). The opinions and information contained herein are based on available data believed to be reliable. It is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered by this newsletter. RHBIM does not warrant the accuracy of anything stated herein in any manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against RHBIM. RHBIM and/or its associated persons may from time to time have an interest in the securities mentioned in this newsletter. This newsletter may not be reproduced, copied or circulated without the prior written approval of RHBIM.
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