rakuten trade market reports : Page 30

Major stock markets ended mostly in negative territory last week amid the slowing down of global economic growth. Shanghai Composite Index fell the most, dropping 1.51% due to disappointing economic numbers from China and the escalating trade tension.
In local market, the FBM KLCI lost 0.55% to its lowest level since Aug 2015. Weekly foreign funds were negative with RM150.9m of net outflow. Performance amongst the FBMKLCI components saw 10 gainers to 20 losers.
Top 3 performers include SIMEPLT (+1.05%), AXIATA (+0.93%) and PETDAG (+0.77%) while the 3 losers were TOP GLOVE (-3.79%), GENTING (-3.37%) and DIALOG (-2.02%).

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The verdict is out, and Malaysia remains in the FTSE Russell World Government Bond Index, however it remains on the watch list and will be reviewed again next March in 2020.
The potential bond outflow feared by many is now behind us as we look forward to the upcoming Budget to be in focus.
Pre budget rally for our markets could be in the making as our market continue to hover near the 1,600 level, we advocate investors to position themselves.

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News on potential trade deal in the horizon as comments by Trump saw the Dow Jones recover to close higher after falling as threat of impeachment looms.
On the local front, the decision by FTSE Russell on Malaysia government bond’s participation in the World Government Bond Index decision will be an important event to look out for today.
Our FBM KLCI is expected to be range bound hovering close to 1,600 level as the regional markets are expected to take cue from the higher close in US markets last night.

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Funds continued with their exodus from equities as investors are heading for safer haven like Treasuries. As a result, the US 10-year yield had declined to 1.65% from above the 1.90% level only 2 weeks ago.
If this persists, the 10-year yield may re-test the 1.50% threshold anytime soon. Domestically, there are murmurings that Budget 2020 may look to lowering corporate tax which will be a solid booster if true.
We expect it will be another nonchalant trading day with the FBM KLCI to trend between the 1,585 and 1,595 range as regional bourses are seen to weaken today.

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We view Budget 2020 as one of the most crucial over the past years for the revival of the ailing domestic economy and sentiments.
A lot has been said about the wish list and we believe it is time the authorities take heed of what is really required with implementation of some radical measures namely revisiting the likes of improving liquidity within the financial sector which has been drastically missing over the past years.
Therefore, if Budget 2020 is just another sitting on the fence attempt, we reckon the agony would only be prolonged.

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