rakuten trade market reports : Page 46

It was shortlived. Foreign funds inflows which started the month of June on a positive note has now turned negative again. For the first week of the month, net foreign inflows totalled RM409m before foreign fund reverted to their selling mode again.
Last week saw another RM469m of foreign net outflow pushing month to date flows to a -RM60m. However, we expect foreign flows to be positive in view of the imminent rate cut in the US which should see funds returning to higher yield investment destinations.

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Regional markets closed mixed last week on the back of on-going trade tension between the US and China. The DJI continued its positive close rising 0.1% or 26.93 to 26,089.61 with markets expecting the Feds to ease before year end.
The local bourse FBM KLCI succumbed to profit taking after rallying to 1,650 points and have since lost 1.02% or 16.84 points for the week to 1,638.63.
Foreign funds have turned negative again after a week of positive inflow. Performance amongst the FBMKLCI components saw 19 losers to 8 gainers.
Top 3 performers include AIRPORTS (+3.94%), Sime Plantation (+1.97%) and MISC (+15.7%) while the top 3 losers were TNB (-4.55%), P Metal (-4.24%) and IOI (-3.02%).

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Interests on the construction sector is certainly gathering momentum of late. We noticed that more and more construction related players are highlighting their interests on the impending RM44bn ECRL (East Coast Rail Link) project.
Meanwhile, we believe there to be loads of speculation on the potential ECRL participants and we prefer the likes of Gamuda, IJM Corp, Econpile, George Kent, Crest Builder, Vizione and Sunway Construction.

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Expectations of further rate cut in the US has heightened with the US 10-year yield declined to 2.12% yesterday from the year high of 2.79% earlier this year.
It is now widely anticipated that there may be two rate cuts by end 2019. In view of this, we can also anticipate that the US dollar to experience some weaknesses ahead.
Meanwhile, crude price volatility continued with the Brent now trading at below the US$60/barrel due to higher than expected stockpile in the US.

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Oil prices continue to be volatile impacted by both the demand and supply. D
Despite the move to reduce supply, crude oil price remain off their peak as the ongoing US/China trade spat has had affected demand to decline amid an expected slowing global economy.
As a result, Brent has dropped to US$61.50 a barrel from US$72.50 in mid-May with the WTI easing to US$52.50 from US$63.00 over the same period. There remain a lot of uncertainties thus we anticipate crude price to be volatile over the immediate term.

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