EUR/USD to Face Larger Rebound on Dismal 4Q U.S. GDP

Companies:

• EUR/USD

Symbol	Price	Change
EURUSD=X	1.1351	+0.0027

- U.S. Economy to Expand for Third Straight Quarter in 2014.

- Personal Consumption to Grow 4.0%- Would Mark Biggest Advance Since 4Q 2010.

Trading the News: U.S. Gross Domestic Product (GDP)

The advance U.S. 4Q Gross Domestic Product (GDP) report may generate a larger rebound in EUR/USD should the fresh batch of data highlight a slowing recovery in the world’s largest economy.

What’s Expected:

Why Is This Event Important:

Even though the Federal Open Market Committee (FOMC) is widely expected to raise the benchmark interest rate in mid-2015, a dismal GDP print may push the central bank to further delay its normalization cycle especially as it struggles to achieve the 2% target for inflation.

Expectations: Bearish Argument/Scenario

Release	Expected	Actual
Durable Goods Orders (DEC)	0.3%	-3.4%
Advance Retail Sales (MoM) (DEC)	-0.1%	-0.9%
Average Hourly Earnings (YoY) (DEC)	2.2%	1.7%

Subdued wages paired with the recent contraction in private consumption may generate a marked slowdown in economic activity, and a weaker-than-projected growth rate may undermine the bullish sentiment surrounding the dollar as it drags on interest rate expectations.

Risk: Bullish Argument/Scenario

Release	Expected	Actual
Consumer Confidence (JAN)	95.5	102.9
NFIB Small Business Confidence (DEC)	98.5	100.4
Non-Farm Payrolls (DEC)	240K	252K

Nevertheless, improved confidence along with the ongoing recovery in the labor market may prompt a strong GDP figure, and a positive development may promote a further decline in EUR/USD amid the deviation in the policy outlook.

How To Trade This Event Risk

Bearish USD Trade: 4Q GDP Fails to Meet Market Expectations

• Need to see green, five-minute candle following the GDP report to consider a long trade on EURUSD
• If market reaction favors a short dollar trade, buy EURUSD with two separate position
• Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward
• Move stop to entry on remaining position once initial target is hit; set reasonable limit

Bullish USD Trade: Growth Rate Expands 3.0% or Greater

• Need red, five-minute candle to favor a short EURUSD trade
• Implement same setup as the bearish dollar trade, just in reverse

Potential Price Targets For The Release

EUR/USD Daily

• Keeping a close eye on the RSI as it continues to flirt with the 30 level; rebound from oversold territory to favor a larger rebound for EUR/USD.
• Interim Resistance: 1.1440 (23.6% retracement) to 1.1470 (78.6% expansion)
• Interim Support: 1.1096 (January low) to 1.1100 pivot

Impact that the U.S. GDP report has had on EUR/USD during the last release

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
3Q A 2014	10/30/2014 12:30 GMT	3.0%	3.5%	+12	+19

3Q 2014 U.S. Gross Domestic Product (GDP)

The U.S. economy advanced more-than-expected in the third-quarter, with the growth rate expanding another annualized 3.5% following the 4.6% expansion during the three-months through June. At the same time, Personal Consumption climbed 1.8% during the same period amid forecasts for a 1.9% print, while the core Personal Consumption Expenditure (PCE) narrowed to 1.4% from 2.0% in the second-quarter. Despite the better-than-expected GDP print, the Fed appears to be in no rush to normalize monetary policy as it struggles to achieve the 2% target for inflation. The initial reaction in EUR/USD was short-lived as the pair snapped back from the 1.2550 region, with the pair ending the day at 1.2602.

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Ringgit closes weaker against US dollar

KUALA LUMPUR: The ringgit closed weaker against the US dollar today as investors remained cautious over the outcome of Bank Negara Malaysia (BNM) policy meeting today, dealers said.

At 5pm, the ringgit was quoted at 3.6170/6200 versus the US dollar from 3.5960/5990 yesterday.

A dealer said the local unit fell to reflect the perceived risks of a surprised interest rate cut eventhough such move was seen as unlikely.

"BNM is expected to keep overnight policy rate unchanged at 3.25 per cent, as the country's economy remains at risk from a slump in oil prices and a weakened currency," he said.

The local note was mostly lower against other major currencies. It firmed against the Singapore dollar to 2.6777/6811 from Tuesday's 2.6806/6832. Itt depreciated against the yen to 3.0702/0733 from 3.0449/0479 previously.

The local unit eased against the British pound to 5.4924/4984 from 5.4336/4395 yesterday and weakened against the euro at 4.0999/1040 from 4.0768/0805 on Tuesday

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News Highlights-

• The ringgit opened easier against the US dollar Wednesday on profit-taking after yesterday's gains.
• Share prices on Bursa Malaysia were lower in early trade today, tracking overnight losses on Wall Street, FBM KLCI stood at 1,796.88, down 6.29 points, after opening 8.41 points lower at 1,794.76.
• According to a survey done by HSBC, Up to 88% of Malaysians are concerned that they will not have enough money after retiring.  it showed that the respondents here was the highest in Asia. Paying off debts is stopping them from preparing adequately (for retirement) and they see repaying their mortgage as a barrier.
• Loss-making K-Star Sports Ltd said it will take another three years to turnaround the sports footwear maker as market conditions in China remain challenging due to the current oversupply situation in the manufacturing segment.
• Software solution provider Systech Bhd was once again slapped with an unusual market activity (UMA) query by Bursa Malaysia yesterday following the rise in its share price and trading volume. The last UMA it received was in November last year after its share price soared by more than threefold. In response, it said it is unaware of any corporate development, rumour and other possible explanation that might have contributed to the spike in share price and trading volume.
• Benalec Holdings Bhd will start work on its 3,485 acre Tanjung Piai Integrated Petroleum & Petrochemical Hub and Maritime Industrial Park next month, with the approval of its detailed environment impact assessment (DEIA) study by the Department of Environment (DOE).
• The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) is still hoping for lower electricity tariff despite the government ruling out such possibility. In a statement it said Tenaga Nasional Bhd should lower electricity tariff with immediate effect to bring down the cost of doing business and to stabilise the cost of living.
• Asia Bioenergy Technologies Bhd's (AsiaBio) proposed venture into the oil and gas transportation industry. It signed a heads of agreement (HOA) with Hoe Leong Corp Ltd (HCL), Sumatec and Reachmont Logistics Sdn Bhd (RLSB) to facilitate the acquisition of Semua Shipping Sdn Bhd (SSSB) and Semado Maritime Sdn Bhd (SMSB) for RM168 million by the group.
• Many of the 50 largest publicly-listed insurance companies in Asia Pacific by market capitalisation have been found wanting in best practices in corporate governance, with transparency being the key shortcoming.
• Caring Pharmacy Group Bhd's pre-tax profit for the second quarter ended Nov 30, 2014 (Q2 FY15) fell 17.18% to RM2.96 million from RM3.57 million a year ago due to lower profit margin arising from lower selling price as a result of market competition.

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FTSE Bursa Malaysia update

KUALA LUMPUR: At 10.30 a.m. today, there were 184 gainers, 302 losers and 287 counters traded unchanged on the Bursa Malaysia.

The FBM-KLCI was at 1,800.07 down 3.10 points, the FBMACE was at 6,451.36 up 30.72 points, and the FBMEmas was at 12,382.29 down 16.15 points.

Turnover was at 599.463 million shares valued at RM373.338 million.

 

Oil drops more than 1pc on firm dollar, US stock build

SINGAPORE: Oil fell more than 1 percent on Wednesday as the dollar strengthened in early Asian trade, while an industry report showing a larger-than-expected rise in U.S. crude inventories also dragged on prices.

Crude futures settled up more than 2 percent on Tuesday when the dollar index posted its biggest fall since early October amid soft U.S. data that cast doubts about the underlying optimism on the outlook for the world's biggest economy.

"The key driver for oil prices in the last few days has been currency fluctuations ... we had seen some weakness in the U.S. dollar which help support prices overnight," Ric Spooner, chief analyst at CMC Markets in Sydney said.

"Oil eased a little bit in the Asian time zone, possibly reflecting the fact that the dollar is a little bit stronger."

Brent crude hit a low of $48.79 a barrel and was down 68 cents at $48.92 by 0255 GMT. U.S. crude was at $45.41 a barrel, down 82 cents, after earlier hitting $45.33.

Brent has traded in a $48-$50 range in the past week, pushed either way by currency changes amid a lack of fundamental news to drive prices.

Investors are looking ahead to official U.S. inventory data due later on Wednesday.

The American Petroleum Institute said late on Tuesday that U.S. crude inventories rose 12.7 million barrels last week, triple the volume expected.

A persistent global supply glut has already dragged down oil prices by around 60 percent since June last year.

"The overall expectation is that global supply is outstripping demand at the moment and so unless we see some really substantial changes to inventory numbers, oil prices are probably not going to move too much," Spooner said, adding that Brent is supported at $47.60 a barrel in the short term.

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Highlights-

• Malaysia share prices opened lower on Tuesday with the FTSE Bursa Malaysia Kuala Lumpur Composite Index down 6.81 points to 1789.96.

• The ringgit opened higher against the US dollar today on short covering activities and against other major currencies, the ringgit was traded mixed.

• Continuous uncertainty in Europe shifted investors interest to the Asian region and this is expected to benefit countries which has sound economy and stable politics such as Malaysia.

• Bursa Malaysia Bhd will make various amendments to its Main Market and Ace Market listing requirements to promote business efficacy and enhance market quality.

• ARC Ratings SA, a global rating agency, has assigned a long-term foreign currency issuer rating of "A" to the Malaysian government. The agency also assigned a long-term local currency issuer rating of "A+" to Malaysia.

• Eversendai Corp Bhd has been awarded a contract worth RM184 million by Reliance Industries Ltd of India for the supply of steel materials, connection design, engineering and fabrication for the construction of the Dhirubhai Ambani International Convention and Exhibition Centre (DAICEC) in Mumbai, India.

• Malayan Banking Bhd (Maybank) expects 20% growth in billings from small and medium enterprises card merchants this year, driven by its portable payment device, namely Maybank mobile point of sale (mPOS) service that allows merchants to accept card payments.

• BMW Group Malaysia, which expects another record breaking sales this year, aims to make Malaysia an export hub for the Asean region, in particular for energy efficient vehicles.

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JCorp interested to acquire all NFC farms: Ismail Sabri

SERDANG: Johor Corporation (JCorp) is interested to acquire all National Feedlot Centre's (NFC) satellite farms, including the one in Gemas, said Agriculture and Agro-based Industry, Datuk Seri Ismail Sabri Yaakob.

"JCorp has submitted its application to me and it will submit a detailed technical report to the Veterinary Department," he said.

Ismail Sabri said this at a media briefing after presenting a special address to the ministry's staff here today.

He said the matter was still at the discussion stage and it still needed the consent of the Negeri Sembilan government which is responsible for the NFC farm in Gemas.

NFC has 61 satellite farms in Johor, Negeri Sembilan, Perak, Kedah, Kelantan and Terengganu.

The minister said reviving the farms was one of the ministry's initiative to boost livestock productivity, including the opening of new breeding areas in Perak.

"We are also going to focus on breeding cattle for milk and beef," he said.

Ismail Sabri said the ministry also wanted to cooperate with government-linked companies (GLCs) to help the country boost agriculture output.

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KL shares end lower, KLCI down 6.64 pts

KUALA LUMPUR: Share prices on Bursa Malaysia fell today, weighed down by profit-taking in heavyweights after recent rally, dealers said.

At 5pm, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) stood at 1,796.44, down 6.64 points, after opening 2.59 points lower at 1,800.49.

The benchmark index moved between 1,792.65 and 1,801.06 throughout the day.

Dealers said persistent selling pressures dragged the FBM KLCI down but buying interest in certain blue-chips and low-liners prevented further losses.

"The market edged lower in line with regional peers and tracked the weak cue from Wall Street last week," a dealer said.

He said the sentiment was also dampened by reports of the victory by the anti-austerity Syriza party in the recent Greek elections.

It had raised concerns that the country could abandon budget constraints and cause instability in Europe, he said.

The market breadth was negative. Decliners outpaced gainers by 559 to 312, while 266 counters were unchanged, 597 untraded and 23 others suspended.

Total volume declined to 1.88 billion shares worth RM2.13 billion from 2.61 billion units valued at RM3.13 billion last Friday.

On the scoreboard, the FBM Emas Index fell 41.42 points to 12,370.68, FBMT100 Index slipped 35.601 points to 12,074.63 and the FBM Emas Shariah Index lost 35.609 points to 12,966.44.

On a sectoral basis, the Industrial Index slipped 10.14 points to 3,279.7, Finance Index eased 81.91 points to 15,594.38 and the FBM 70 fell 4.73 points to 13,456.

The FBM Ace rose 6.48 points to 6,367.08 and Plantation Index went up 1.26 points to 7,933.35.

Among actives, Daya Materials fell one sen to 15.5 sen, KNM declined 5.5 sen to 57 sen and Systech decreased half-a-sen to 36 sen.

Of the heavyweights, Tenaga Nasional fell two sen to RM15.08 while Maybank and Public Bank slipped eight sen each to RM8.92 and RM18.06 respectively.

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Kwasa Land lists 21 developers for next request R2-1 proposal

KUALA LUMPUR: Kwasa Land Sdn Bhd,the master developer of the iconic Kwasa Damansara township in Sungei Buloh, has named 21 Tier-2 developers who had been successfully prequalified for its next Request for Proposal (RFP) R2-1.

The companies are Amcorp Properties Bhd, Encorp Bhd, Glomac Bhd, Ivory Properties Group Bhd, Johor Land Bhd, KSK Group Bhd, KSL Holdings Bhd, Malton Bhd, MKH Bhd, Nadayu Properties Bhd, Naim Land Sdn Bhd, Naza TTDI Sdn Bhd, OSK Property Holdings Bhd, Paramount Corporation Bhd, Perdana Parkcity Sdn Bhd, Plenitude Bhd, Reliance Pacific Bhd, TH Properties Sdn Bhd, Titijaya Group Sdn Bhd (Tenang Sempurna Sdn Bhd), United Malayan Land Bhd, and Worldwide Holdings Bhd.

Kwasa Land is a unit of the Employees Provident Fund (EPF).

Managing Director Mohd Lotfy Mohd Noh said the RFP seeks a development partner for a proposed residential development of a land area measuring 5.14 hectares (12.7 acres) identified as Project R2-1 based on the approved planning approval.

"Invitations have been sent out to the 21 developers who were successful in the pre qualification exercise," he added, in a statement today.

Kwasa Land said the closing date for all RFP submissions is March 31, 2015.

It said the whole development within the R2-1 land must be fully completed within six years. - Bernama

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Revised Budget not required to be tabled again: MoF

KUALA LUMPUR: The revised 2015 Budget is not required to be tabled again as a number of proactive measures announced recently did not involve any additional or supplementary expenditure, said the Finance Ministry.

The ministry said the measures were made known at the Special Address by Prime Minister Datuk Seri Najib Tun Razak on Tuesday and did not exceed the ceiling approved by Parliament.

"As a responsible government, the ministry will continue to closely monitor external developments and the impact on the domestic economy.

"The Finance Ministry welcomes any queries or clarifications on the Special Address at pro@treasury.gov.my," the ministry said in a statement here today.

It also elaborated on Najib's special address recently, stating that the 2015 Budget was formulated based on Tapis crude oil price at US$105 per barrel (US$1.00=RM3.60).

It said Tapis crude oil typically commands a premium of about US$5 per barrel over Dated Brent, the global benchmark.

"Given the need to monitor prices closely, amid continued falling crude oil prices, reference was made to Dated Brent at US$100 per barrel in the Prime Minister's Special Address.

"The government has since revised the price assumption for Dated Brent to an average of US$55 per barrel for 2015," the statement noted.

In another development, the ministry said the RM2 billion for contingency reserve did not come into the calculation of the fiscal deficit.

"The contingency reserve is meant for urgent and unforeseen expenditure for which there is no existing allocation.

"It is only recognised as expenditure when it is used," it said.

As announced in the 2015 Budget, the development expenditure of RM50.5 billion, comprises RM48.5 billion in development expenditure and RM2 billion for contingency reserve.

The budget deficit for 2015 was initially estimated at RM35.7 billion or 3.0 per cent of gross domestic product (GDP).

However, with lower revenue and a revised GDP growth forecast for 2015 of 4.5-5.5 per cent, the budget deficit is now estimated at 3.2 per cent of GDP or RM37 billion. - Bernama

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UMWG targets sales growth up to RM100mil for new Grantt lubricants

SHAH ALAM: UMW Grantt International Sdn Bhd (UMWG) is targeting sales growth of up to RM100 million over the next five years for the newly-improved range of GRANTT lubricants. UMW Engineering and Manufacturing Executive Director, Megat Shahrul Azmir, said the target was expected to be achieved through several phases of penetrating the South-Eeast Asia and Asia-Pacific markets. "We are targeting Indonesia, Myanmar, Laos and Cambodia in our first phase of developing an export industry for the product. "The GRANTT lubricants have been in the market since 2012 but only now they are upgraded to a premium product for the company. "Based on our experience in producing lubricants for 80 years, we are not strangers in delivering the best quality to our consumers," he told reporters here today. Megat Shahrul said the GRANTT CMO Stellar lubricant was also recognised by American Petroleum Institute and European Automobile Manufacturers Association. "We are also capable of producing 50 million litres per year for all types of lubricating oil and we are confident that we can deliver what the market needs," he said. The GRANTT lubricant range includes Passenger Car Motor Oil, Motorcycle Oil, Diesel Engine Oil, Auto Transmission Fluid and Industrial Oil which comes in three variants - fully synthetic, synthetic blend and mineral premium. - Bernama

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Highlights-

• The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) opened higher Friday, extending yesterday’s gains, as the European Central Bank (ECB) revealed its stimulus expansion plan
• which included buying 1.1 trillion euros worth of bonds, the key index stood at 1,798.78, up 17.03 points, after opening 10.72 points better at 1,792.47.
• Overnight rally in the oil price has led to a stronger ringgit versus the US dollar today. It was quoted at 3.6000/6030 against the greenback compared with 3.6140/6170 yesterday.
• The FTSE Bursa Malaysia KLCI futures (FKLI) contract on Bursa Malaysia Derivatives opened higher in tandem with the better cash market.
• Gold futures contract on Bursa Malaysia Derivatives opened higher today with one contract month traded, dealers said. At 9.30 am, January 2015 gained 22 ticks to RM150.10.
• Asian equity markets rallied Friday after the European Central Bank announced a huge cash injection to kickstart the eurozone economy, while crude prices surged on news that the monarch of oil kingpin Saudi Arabia had died.
• The euro edged higher Friday but remained under pressure after sinking to its lowest level in more than a decade after the European Central Bank launch a vast bond-buying programme aimed at kickstarting the eurozone economy.

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KL shares extend gains at opening

KUALA LUMPUR: The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) opened higher Friday, extending yesterday's gains, as the European Central Bank (ECB) revealed its stimulus expansion plan which included buying 1.1 trillion euros worth of bonds, dealers said. At 9.03 am, the key index stood at 1,798.78, up 17.03 points, after opening 10.72 points better at 1,792.47. Market breadth was positive with gainers outpacing decliners 236 to 46 while 123 counters were unchanged, 1,329 untraded and seven others suspended. Turnover stood at 133.22 million shares worth RM67.99 million. On other scoreboards, the FBM Emas Index rose 67.07 points to 12,351.86, the FBMT100 Index gained 104.27 points to 12,084.79 and the FBM Emas Shariah Index advanced 62.57 points to 12,902.83. The FBM 70 perked 76.77 points to 13,446.16 while the FBM Ace added 21.53 points to 6,340.93. On a sectorial basis, the Industrial Index declined 13.72 points to 3,248.43, the Plantation Index contracted 21.19 points to 7,900.13 but the Finance Index rose 91.53 points to 15,660.9 . Among actives, Nova MSC, Sanichi and The Media Shoppe were all flat at 16 sen, 10 sen and six sen, respectively.

Daya Materials went up half-a-sen to 17 sen and KNM Group increased two sen to 60.5 sen. Of heavyweights, Maybank gained eight sen to RM8.95, TNB went up 52 sen to RM15.04, Public Bank advanced 30 sen to RM18.14, Axiata garnered five sen to RM7.20 and Sime Darby was up six sen at RM9.58. - Bernama

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Highlights

• Share prices were traded marginally lower on lacklustre buying sentiment for blue chips and select heavyweights, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) was down 0.16 of a point to 1,769.93 after opening 2.35 points lower at 1,767.74.
• The ringgit opened higher against the US dollar today on short covering.
• The FTSE Bursa Malaysia KLCI futures (FKLI) contract on Bursa Malaysia Derivatives opened lower Thursday with one contract month traded.
• Gold futures contract on Bursa Malaysia Derivatives opened mostly lower Thursday with five contract months traded.
• Malaysia’s growth, development and deficit ambitions remained on track is an indication of the government’s continued focus on fiscal consolidation.
• Brahim’s Holdings Bhd is on hold call with an unchanged target price of RM1.43, following the company’s memorandum of understanding (MoU) with Servair Investissements Aeroportuaires (SIA), a subsidiary of Serveair which in turn is a subsidiary of Airfrance.
• CIMB Group is downgraded with ‘sell’ call from ‘neutral’ and a target price (TP) of RM5.20, on the bank’s higher loan provisioning and softer revenue growth expectations ahead.

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Bursa Malaysia ends on a firm note

KUALA LUMPUR: Bursa Malaysia closed higher today, supported by gains in small-capitalised counters as well as plantation and industrial-related shares, a dealer said. As at 5pm, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) stood at 1,770.09, up 19.98 points after moving between 1,751.46 and 1,770.09 throughout the day. PPB Group, Petronas Chemicals and Sime Darby were the top contributors to the composite index, adding RM1.20, 17 sen and 21 sen, to RM15.20, RM5.11 and RM9.50 respectively.

The three, accumulatively contributed 7.165 points to the composite index.

"The FBM KLCI displayed recorde good gain today, an indication of the well-acceptance of the revised budget announced by Prime Minister Datuk Seri Najib Tun Razak yesterday," he told Bernama. On the scoreboard, the FBM Emas Index increased 120.09 points to 12,182.11, FBMT100 Index was up 116.13 points to 11,888.96 and the FBM 70 rose 59.37 points to 13,216.57. The FBM Ace increased 42.69 points to 6,237.55 and the FBM Emas Syariah Index improved 139.53 points to 12,682.31. On a sectoral basis, the Industrial Index gained 71.65 points to 3,236.14, Plantation Index advanced 71.66 points to 7,838.32 and the Finance Index perked 47.27 points to 15,603.35.

Gainers trounced losers by 558 to 287, while 280 counters were unchanged, 616 untraded and 19 others suspended.

Total volume rose to 2.16 billion units worth RM2.45 billion from 2.05 billion units worth RM2.02 billion on Tuesday

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Highlights

• The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) opened higher Wednesday morning on renewed buying support, the key index stood at 1,752.03, up 1.92 points, after opening 2.79 points better at 1,752.9.

• The ringgit extended its losses against the US dollar on selling pressure amid concerns over the country's economic growth.

• Gold futures contract on Bursa Malaysia Derivatives opened marginally higher Wednesday with three contract months traded.

• The FTSE Bursa Malaysia KLCI futures (FKLI) contract on Bursa Malaysia Derivatives opened higher Wednesday despite the lower performance in the underlying cash market, with only one contract month traded

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Foreign outflow from M'sian equity market highest in 17 months

PETALING JAYA: Malaysia saw the largest weekly outflow from its equity market last week since August 2013, as selling by foreign investors intensified amid uncertainties arising from the current weak oil prices and the prospects of higher US interest rates in the coming months.Foreign money outflow from the Malaysian equity market totalled RM1.42bil for the week ended Jan 16, which was more than double from the RM535.2mil registered in the preceding week, according to the latest fund flow report by MIDF Equity Research.

The brokerage noted that it was the second time in six weeks that foreign money outflow from the Malaysian equity market exceeded the RM1bil mark. The amount was also the biggest outflow for the country in almost two and a half years.“Foreign investors were net sellers every single day last week,” MIDF said.

“Selling peaked on Wednesday, when a net amount of RM413.1mil was offloaded,” it added, noting that it was the first time that foreign investors had sold more than RM400mil in a single day in the open market since Feb 4 last year. 

An analyst with MIDF told StarBiz that the trend of foreign money outflow from Malaysia, as well as other Asian equity markets, would likely continue in the weeks ahead until new impetus emerged for investors to put their money in the region.“On a positive note, the pace of outflow from the region has already slowed down,” he said. Year to date, the cumulative net foreign outflow from the Malaysian equity market stood at RM2bil, which was equivalent to about 30% of the total outflow recorded in 2014. “The foreign selldown on Bursa Malaysia is happening amid heightened level of participation,” MIDF pointed out. “Foreign participation rate (daily average gross purchase and sale) surged to RM1.14bil, the second week in a row that the amount exceeded RM1bil,” it added. The average daily foreign participation rate in 2014 was RM980mil.

According to MIDF, local institutions supported the equity market aggressively last week, mopping up RM1.34bil worth of shares. Their participation rate was also elevated at RM2.2bil while local retail investors remained largely on the sidelines, with a participation rate of only RM756mil and a net buying of RM75mil worth of shares. Rabobank said in its recent note to clients: “Without high oil prices, there appears far less foreign investor appetite for Malaysia’s idiosyncrasies.” The Dutch multinational financial institution pointed out that besides the equity market, the Malaysian bond market, which had high level of foreign ownership of more than 40%, was also showing some loss of foreign investor interest. 

Analysts said selling by foreign investors in the Malaysian bond market was expected to pick up pace in the current quarter. With continued foreign money outflow from Malaysia’s capital market, the ringgit would likely remain weak, with several research houses anticipating the country’s currency to weaken to 3.70 against the US dollar in the first quarter of this year before rebounding marginally in the subsequent quarters. Maybank Investment Bank Research, for one, said in its note to client: “Taken into consideration domestic development, heightened market volatility, potential US tightening tantrums, potential downward revision to oil prices for 2015 to US$50 per barrel (from US$70 per barrel), we have revised our US dollar-to-ringgit forecast higher to 3.70 for the first quarter.”

The domestic brokerage said it expected the ringgit to remain volatile in the subsequent quarters, rebounding to 3.58 against the US dollar in the second quarter, but weaken again to 3.65 in the third quarter before regaining strength to 3.50 in the final quarter of the year. At 5pm yesterday, the ringgit was traded at around 3.57 against the greenback. Crude oil prices weakened yesterday, with the international benchmark Brent falling back to the US$49.50 per barrel level after a weak rebound last Friday to US$50.17 per barrel.

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Oil and gas stocks top gainers

KUALA LUMPUR: Buying interest in oil and gas (O&G) stocks perked up in Monday’s mid-morning trade as investors tried to take a longer view of the oil industry despite the 50% fall in crude oil prices since June 2014. At 10.30am, the FBM KLCI was up 4.5 points or 0.26% to 1,748.07. Turnover was 530.21 million shares valued at RM295.65mil. There were 358 gainers, 166 losers and 245 counters unchanged.

Reuters reported benchmark Brent crude futures were trading at US$49.83 per barrel at 0125 GMT, down 34 cents since their last settlement. U.S. crude was trading down 41 cents at US$48.28 a barrel. Oil prices have dropped by more than half since last June as production around the world has soared while demand slows. Although the International Energy Agency (IEA) said that a reversal in trend was possible this year, it added that prices may fall further before the market begins to rise again.

At Bursa Malaysia, Uzma rose 15 sen to RM1.88 after analysts turned more upbeat about the company. Coastal Contracts rose 12 sen to RM2.78, SapuraKencana Petroleum gained 11 sen to RM2.61 and UMW O&G gained 10 sen to RM2.70. KNM added one sen to 45 sen in active trade while Sumatec gained 0.5 sen to 21 sen.

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Net foreign selling of Malaysian equities at RM1b in 4 da

KUALA LUMPUR: Foreign funds continued to sell down their stakes in Malaysian equities in the four days ended Jan 15, pushing the total net selling to rise to RM1.045bil, according to BIMB Securities Research.

It said on Friday net foreign outflow was RM336.7mil Thursday but it “expects the FBM KLCI to remain firm and expect foreign funds outflow to trickle down following the heightened volatility in Eurozone”.

BIMB Research said foreign funds continued to ignore Malaysia equities despite the 2.99 points gained on Thursday to close at 1,745.  However, local funds were net buyers at RM300.1mil and retail investors net buyer also at RM36.6mil.

Overnight on Wall Street, investors sold down on some disappointing earnings from the banks as the DJI Average lost another 106.38 points to 17,320.71 or almost 420 points during the course of this week.

European markets were mostly higher attributed to a rebound in commodity prices. Nonetheless, all eyes were on Switzerland following the Swiss National Bank’s move to scrap its euro cap on the franc. In Asia, equities were slightly firmer amid the global volatility as foreign funds seeped into the region.

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Market Summary

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KLSE Latest Quarter Report

All the KLSE latest quarter report announcement or Bursa Malaysia stock latest quarter report announcement will be posted within a while. Each of the KLSE stocks or Bursa Malaysia stocks may announce their quarter report in different date and time. All the latest KLSE quarter report announcements will be posted in this section immediately once the Bursa Malaysia stock announce their quarter report..

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