Market Reports

• Equity markets are set to remain rather volatile in view of the ongoing corporates earnings in the US which has been less than impressive so far. In addition, fresh protests in Hong Kong could further exacerbate the already fragile buying sentiments.
• Therefore, we reckon the FBM KLCI to remain stuck within a range of 1,640-1,660 over the immediate term.

• Regional markets were mixed last week with the Shanghai Composite Index rose 1.99% and the Dow inched up 0.08% to 27,192.45 points. The FBM KLCI remains on profit taking mode easing 7.4 points for the week to 1,647.96.
• Foreign funds flow was negative for the week with RM53.4m net outflow. Performance amongst the FBMKLCI components saw 24 losers to 5 gainers.
• Top 3 performers include GENM (+16.07%), GENTING (+7.13%) and PMETAL (+3.11%) while the 3 losers were PETGAS (-4.02%), SIME (-2.23%) and AMMB (-2.08%).

• Genting Malaysia has fully resolved its dispute with Fox Entertainment Group over the development of its outdoor theme park. We expect Genting Malaysia share price to continue with its upward momentum possibly breaching the RM4 level.
• Recall that share price was hovering at the RM4.50 level before succumbing to below the RM3 threshold when news of the dispute broke out last year.

• The word recession has had appeared rather frequently of late. In real terms, the word “Recession” denotes a business cycle contraction when there is a general decline in economic activity usually defined as a negative economic growth and generally occur when there is a widespread drop in spending.

In Malaysia, the government is steadily pump-priming the construction sector to a tune of around RM400bn which will cascade down to other sub-segments. Therefore, we infer that recession is not happening any time soon.

• Crude oil price has been rather steady of late with some upward bias as tension within the Gulf may be a catalyst for further upside. The Brent Crude closed 0.52% higher yesterday at US$64.16 following the tit for tat situations between Iran and the US.
• With no apparent resolution in the immediate term, we reckon any escalations of the ongoing tension will only prop crude prices higher. May be time to look at some Oil & Gas stocks namely Hibiscus, Serba Dinamik, Bumi Armada, Yinson and Sapura Energy.