Crude Oil prices remained bearish as US reported a rise in US crude stocks by 4.7 million barrels in the week, the biggest one-week rise since April.
As the fundamental for crude oil is still weak, the price is expected to go down further for last quarter of 2015.
DJIA
A sharp fall in DJIA yesterday mainly due to the uncertainties of the rate increase by Fed. Investors remained concern on the outlook of interest rates after US job data had been reported.
US unemployment rate fells to seven year low which is a good news, however, the nonform payrolls drops significantly.
From my view of market outlook as at today, Fed is unlikely to increase their rates due to the disappointing nonfarm payroll data which is expected to increase more. This shows that US itself is "not ready" for the rate increase by Fed in September & it would leads to a negative impact on US's economy. Another point that Fed is unlikely to increase rate is due to the rapid slowing down of China's economy.
Meanwhile, Malaysia reported a good news yesterday that it's foreign reserves increases slightly from USD 94.5 to USD 94.7. It is reported that the reserves are sufficient to finance 7.4 months of retained imports, and are 1.0 times the short term external debt. Another good news is that the export data for July increased at about 3.5%, which is better than forecast 3.2 %, mainly due to the weaker commodity price & softening of MYR.
However, MYR hits as high as RM 4.31 against USD as at today, the depreciation of MYR is still the main factor that leads to continuous recession of Malaysia's economy.
Feel free to comment :)
This will be my first sharing of my thought towards KLCI as at today.
The chart above showed KLCI for 2 weeks.
Based on Daily Trading Participants data, the local institutions are the only net buyers from 24/08/2015 until 27/08/2015.
This shows that there is a very huge buying support by local institutions within last week, however, the selling by local institutions is also high. Therefore, it is quite obvious that the KLCI is "artificially" supported!
Although the crude oil price rose to USD 48 per barrel (as at today), KLCI doesn't seem quite optimistic for the last quarter of year 2015. A lot shared that it will be a "bull trap" for the temporary hike of KLCI within this few weeks. It will be like the calm before the storm.
From my opinion, this is mainly due to the politics scandals & the weakening of MYR which lost investor's confidence towards Bursa Malaysia.
There is a lot of sharing that US market is a bubble & definitely will burst some day, that will be the time where investors will head back to Asia market, where the time bear market ends in KLCI
However, I would like to say that investors will not necessary choose Malaysia as their investment choice unless the issues mentioned can be solved by that time.
As a conclusion, my view towards KLCI market is not that optimistic at this moment.
