FTSE Bursa Malaysia KLCI (.KLSE) index set to recover this year

FTSE Bursa Malaysia KLCI (.KLSE) index set to recover this year

FTSE Bursa Malaysia KLCI (.KLSE) index set to recover this year

Bursa Malaysia FBM KLCI index has high potential to recover this year backed by strong gross domestic product outlook and better corporate earnings.

Kenanga Investors Bhd’s chief investment officer Lee Sook Yee said continuous reform and divestment of non-core investment in government-linked companies (GLCs) could see further unlocking of the stocks’ value.

More than half of the top 30 companies in the KLCI are GLCs.

“We have Permodalan Nasional Bhd, Retirement Fund Incorporated (KWAP), Khazanah and Employees Provident Fund (EPF) as the main holder. Over the years, the market had been volatile and GLC reform will push the share price up as liquidity of the counter increases,” she told reporters after the listing of OneETF today.

She also said the KLCI index alone does not reflect the overall market’s performance.

“As we saw last year, even though the KLCI index was down, small and medium-sized caps as well as energy counters actually performed well. Hence, only viewing the top 30 companies does not give a full reflection of the economy,” she said.

As for this year, Lee said commodities as well as Petronas-related counters, are expected to perform better than average as crude palm oil prices have rebounded and is now on slow production period, while Petronas outlook remains bright.

Earlier, Kenanga Investors, a subsidiary of Kenanga Investment Bank Bhd has listed OneETF on the Main Market of Bursa Malaysia Securities Bhd.

Kenanga Investment Bank Bhd Group Managing Director Datuk Chay Wai Leong said the listing signalled the company’s first foray into exchange-traded funds (ETFs) by means of leveraged and inverse (L&I) ETFs.

“The Kenanga KLCI Daily 2X Leveraged ETF (KLCI2XL) and the Kenanga KLCI Daily (-1X) Inverse ETF (KLCI1XI) are the first L&l ETFs to be benchmarked against the FTSE Bursa KLCI (KLCI) and the first ETF listing of the new decade on the local bourse,” he said.

Both KLCI2XL and KLCI1XI he said, adopted a futures-based replication investment strategy in order to provide daily performance that closely corresponds to their respective tracked indexes.

Meanwhile, Bursa Malaysia Bhd’s chief executive officer Datuk Muhamad Umar Swift said while ETFs in South East Asia is still in its early stages, it has been garnering strong traction and showing tremendous growth potential.

“The introduction of L&I ETFs, particularly the inaugural KLCI-based OneETF, will further invigorate our local bourse by offering investors a wider range of innovative products catering to varying risk appetites,” he said.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1,593.56.

The projected upper bound is: 1,612.26.

The projected lower bound is: 1,556.67.

The projected closing price is: 1,584.46.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 18.9334. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 10 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 46.40. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 63 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -143.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 3 period(s) ago.

Rex Takasugi – TD Profile

FTSE BURSA KLCI closed down -6.730 at 1,584.730. Volume was 20% below average (neutral) and Bollinger Bands were 6% wider than normal.

Open     High      Low     Close     Volume___
1,593.1001,595.2401,581.5701,584.730 76,066,600
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1,598.81 1,591.23 1,614.63
Volatility: 16 11 10
Volume: 86,462,352 92,753,208 107,440,488

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FTSE BURSA KLCI is currently 1.9% below its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume into .KLSE (mildly bullish). Our trend forecasting oscillators are currently bullish on .KLSE and have had this outlook for the last 13 periods.

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