Friday 29 January 2016

Regional market in positive territory

On the last trading day of January, Asia Pacific markets ended in positive territory, though it is still far from the beginning of the month.

Nikkei 225 soared 2.80 percent or 476.85 points closed at 17518.30 after BOJ announcement of adopting negative interest rate. Following Nikkei, Hang Seng Index surged 487.28 points (+2.54%) ended at 19683.11 at closing. February futures contract up 450 points, closed at 19723. Range of the day for February futures contract was between 19031-19738 (707).

Thanks to the revised Budget 2016, FBM KLCI Index managed to break above resistance 1650. Cash market finished at 1667.80, soared 33.27 points or 2.04 percent. January futures contract settled at 1656.50 (+22.00) while February futures ended at 1660.00 (+33.50). Next month futures was traded between 1627.00-1661.50 (34.50). 

Will the rally continue next month? Maybe. Since Chinese New Year is approaching in a week, there could be a mini CNY rally. However, transaction could be lower for Asia market ahead of the festive season.

We see the nearest resistant for Hang Seng Index at 19880, next 20250. On the downside, immediate support is at 19480, next 19050. For KLCI, immediate resistant at 1680, higher 1700; supports--1645 and next 1620. 


Negative Interest Rate for BOJ

Imagine you are living in a country where the interest rate is negative, what does that mean? It means the money you have sitting in the bank doesn't give you interest! Your money isn't growing!

Today the Bank of Japan announced adopting a negative interest rate for the country. We believe it is a move to stimulate the economy. It is a supplementary increase in Japan's qualitative and quantitative easing programme (QQE). Sounds like the QE2 The States used to have.

Nikkei 225 experienced a roller coaster ride during the trading hours. Finally, the cash market surged 476.85 or 2.80 percent, closed at 17518.30. As for Japanese Yen, we see some weaknesses. ¥100 is equivalent to RM3.40; ¥100~ USD $0.82 or 1USD ~¥120.

Maybe this is the time to visit Japan; time to collect some quality Japanese liquor...


Revised Budget 2016

The Prime Minister announced a Revised Budget 2016, as the Budget was prepared when crude oil was at USD$48 last year, but now crude oil is trading at USD$33.

The announcement could be a catalyst to push up FBM KLCI Index. At closing, the cash market gained 2.99 closed at 1634.53; January futures finished at 1634.50 (+5.00). Range of the day for futures market was trading between 1623.00-1641.00 (18.00). We see near resistant at 1650 and higher at 1680. Support 1600.

There is surprises in our Ringgit movement. Ringgit is strengthened against major currencies after the announcement--against greenback, we see 1USD ~ RM4.17! Against Aussie dollar and Singapore dollar, it broke below RM3.00; and with pound, 1£ is less than RM6.00! We think our RM is undervalue, we are not expecting to see Ringgit strengthened overnight, but over time...perhaps to 1USD ~RM3.80?


Tuesday 26 January 2016

Is Hong Kong Losing Its Luster for Global Investors?

Since our portfolio consists of Hong Kong dollars, Hong Kong equities and hedging through the futures markets, this is an interesting article to share from Bloomberg-- Is Hong Kong Losing Its Luster for Global Investors? 

As Hang Seng Index had fallen 34 percent from the peak, is now the right time to buy and hold? Or the market still have room to drop? Where shall we heading from here? Hopefully this article will give us some hints...


Market rally!

The market rallied for two days, on last Friday and yesterday. However, the gains couldn't sustained and Asia Pacific markets closed in red again, especially Nikkei 225, lost 2.35 percent and Shanghai Composite Index slumped 6.38 percent!

Hang Seng Index futures rebounded to highest 19505 on Monday afternoon. However, as overnight US closed down 208, this caused the Asia market sank again today.

Hang Seng Index closed at 18860.80, lost 479.34 or 2.48 percent. Spot futures closed down 337 at 18901. Since it is final week of the month, it's the time of futures contract rollover again. We think market will hovering around 19000 in short term. Upside resistant 19300, 19700. On the downside, supports are 18530 and 18200.

FBM KLCI Index gained 1.45 ended at 1626.66 at closing. January futures finished at 1629.50 (+1.50). If the market broke above 1630, we see next resistants for KLCI at 1650, higher 1680. Supports are 1600 and 1580. Market could be volatile this week as January futures contract is expiring on this coming Friday.


Saturday 23 January 2016

5 reasons Malaysians' life is more difficult in 2016

The year of 2016 could be a challenging year for stock market investors, as the global market started in a panic sell-off from the first trading day of the year. For Malaysians, it could also be a tough year as the following factors are affecting the daily life of most Malaysians.


1. Rising cost of living

This is not a new thing! Since the GST implementation started in April 2015, all Malaysians are facing this issue. More expensive food from local supermarket and dining out; transportation, daily use products, clothing, medical bills and medicine. Even with the oil price tumbled to US$30; there is no reduction in our petrol price.


2. Depreciated Ringgit

Normally when oil price drop, Malaysians should entitled a cheaper petrol price. However, with US$1 equivalent to RM4.30, we are still paying expensive petrol. The Ringgit is depreciated not only against USD, but against major currencies too. As a result, imported goods are more expensive and travelling abroad, we are paying extra overseas expenses as our Ringgit is very weak. Unless you are an exporter, you will benefit from the weak Ringgit. The glove manufacturers are the biggest winner!


3. Difficulty in applying loan

Not only China is facing a slower economy; in Malaysia, we can feel the declining stock market and economy is moving in a slower pace after GST implementation last year. Banks are tightening the loan approval especially for the housing loan.


4. Stock market crash

Unless you do not invest or speculate in the local stock market. The sell-off since last year is causing most Malaysians financially stranded and mentally drain.


5. Stagnant property market

Malaysia's property price appreciated dramatically since 2008, effects of cheap money flooding around the world. During the past few years, transactions increased no matter is brand new or sub-sale properties. Till now, buyers think it is too pricey to buy and looking for negotiation whereas sellers unwilling to let go at a cheaper price. Plus the tightening bank loan approval, this had become an unhealthy phenomenon and is affecting young couples especially those who just started a family.


The above might not affect all Malaysians, but if it does; we hope there is a solution for every problems. Sit down and figure out the priorities, workout a financial plan and act according to the plan.


Thursday 21 January 2016

Is the selling stop?

The market continue in a depressing mood, with a lower low.

Hang Seng Index slumped 344.15 ended at 18542.15, marked a lower low compared to yesterday. The futures market closed at 18751 (-96), reached highest at 19260 in the morning, but long liquidation sent spot futures to lowest at 18530.

Nikkei 225 lost 2.43 percent or 398.93 closed at 16017.26; Shanghai Composite Index ended at 2880.88 (-95.89) or 3.22 percent and FBM KLCI Index settled at 1600.92 (-17.91).

Currently, DJIA is down 18.60, last reading at 15748.14. How will the US market close by end of the day? How does it affect the Asian market tomorrow? Since the global market is in negative zone for 2 weeks, when is the selling discontinue? Will we see a rebound tomorrow or next trading week?


Wednesday 20 January 2016

The Bear is here...

The selling pressure in Asia market continue today after experienced a technical rebound yesterday.

At yesterday's trading session, Hang Seng Index futures rebounded to 19647, the highest of the week before broke below the psychological level 19000 this morning.

Technically speaking, the Hong Kong and Japan market is now in bear market. A bear market is defined as a price declined of 20 percent or more over at least 2 months of period or from the peak of the price.

Looking at Nikkei 225, today's closing at 16416.19, a decline of 21.65 percent from the peak since last August. Shanghai Composite Index ended at 2976.52, 42.50 percent slump from June 2015.

Today, the Hang Seng Index futures opened gap down 341 points at 19280. Market dived very quickly in the morning breaking below 19000, marked the low for more than 3.5 years. The index futures ranged between 18762-19343 (581) for the day. At the end of the closing, futures ended at 18847 (-774), cash market finished at 18886.30 (-749.51), down 3.8 percent. The closing for Hang Seng Index is a drop of 33.9 percent from last year's peak.

The market is on heavy diarrhea. There is no prescriptions from any politicians or any policy yet. During the stockmarket crash in 2008, we have Quantitative Easing to stop the diarrhea. But this time, what would that be? While there is no prescriptions available yet, we think the best solution is eat healthy and stay hydrated. Which means, while there is risk and opportunities in the wild swing market, take the calculated risk, manage the risk and always protect the profit and capital.


Sunday 17 January 2016

The Bear Is Here?

Once again, Dow Jones dropped 390.97 on Friday closing, ended below 16000 @ 15988.08. The selling will continue on Monday...

Hang Seng Index closed lower at 19520.77 (-296.64); futures ended at 19468 (-342) on Friday. Be prepare to see a lower index for HSI, key support at 19000. However, market is oversold. Any rebound likely will reach 19800 or higher 20200.

FBM KLCI Index finished at 1628.55, down 4.89; spot futures closed at 1615.00 (-15.00). Next support --1580.


Thursday 14 January 2016

Dow plunged 365 points again

We have to get used to the words like tumbles, plunges, slumps etc. These are the words appearing on financial news very often lately.

Again, the overnight Dow Jones closed down sharply. DJIA ended at 16151.41, falls 364.81, equivalent to 2.21 percent.

There is no escape for the Asia Pacific markets. The market was in deep red sea in the morning, except Shanghai market closed in positive, the rest of the Asia Pacific market closed in red. 

In Hong Kong, Hang Seng Index broke year low again. The cash market closed down at 19817.41 (-117.47) at the end the day while January futures contract ended at 19810 (-249); losses narrowed after short covering during second half of the trading session. Range of the day for January futures contract was ranged between 19468-19893 (425).

In Malaysia, FBM KLCI Index dropped 9.10, ended at 1633.44 for cash market and futures, closed down 15 points at 1630.00. Futures market traded between 1624.50-1636.00 (11.50).

It is a tough start for the year and we think there is going to be a wealth shuffle in the year of 2016. There is a risk in certain business closure and retrenchment. Having said that, whatever goes up will come down, whatever comes down will go up. We wouldn't be surprised to see a new trend or market rise up.

With the way market falls, we are not far away from the bear market. But who knows where is the trough. While it is hard to predict where is the dip and when it is over, we think it's best to hold cash and spend wisely. When we see the big title of "bear is here" in the headlines, or people around you are not interested in the stock market, that is the hint we should start buying.


Monday 11 January 2016

HSI plunged 565 closed @ 19888.50

The Asia Pacific markets went southbound again, closing in red with Nikkei closed down 0.40 percent and Shanghai Composite Index ended 5.29 percent lower.

Hang Seng Index broke below 20000, a level not seen since June 2013. The cash market closed at 19888.50 (-565.21), down 2.76 percent. Jan Futures ended 456 points lower, closed at 19943. Today the range for spot month futures contract was traded between 19820-20066 (246).

From the technical point of view, HSI is not looking good. Any bad news will trigger market moves towards the lowest level in 2013, which is 19395. Next support 17857. On the upside, resistance is seen at 20835.

Is this a good time to buy stocks? Depends. It depends on your holding power--financially and mentally. If you have a pile of extra cash which you don't need it, yes you can start collecting quality stocks. Bear in mind, the market sentiments and investors confidence is low at the moment, you'll need time and patience to go through the rough time.

If the portfolio you are holding is full of high dividend and quality stocks, you might experience a wild ride in short term, but long term, we think is fine. If the portfolio is full of speculation stocks, we are afraid you might need to restructure your portfolio at this moment. This is what we think. 

No one knows how low the market will go and how long it will last before we see good days. No matter you are a buyer or short seller, market is full of excitement. Bucket your seat belt and happy trading!


Sunday 10 January 2016

Market closed mixed for the week

The Asia Pacific market closed mixed on Friday after days of sell-off. Apart from Japan, the Australian and New Zealand market ended negative, the rest of Asia market closed in positive territory. But, is this positive gain in Asia market a short one?

Dow Jones finished at 16346.45 on Friday, lost 167.65 points. Since DJIA ended in red, we think the market will open lower again on Monday morning.

Hang Seng Index closed +120.37 @ 20453.71 while January futures contract closed up 51 @ 20399. The entire range for the week for spot futures ranged between 20255-21850 (1595). We think 20000 is the crucial psychological support for HSI. Is the market going to break below 20000 tomorrow? 

In Malaysia, FBM KLCI was traded between 1637.50-1697.50 (60) last trading week. The cash market finished at 1657.61 (+2.48); spot futures closed +7 @ 1654.50. We see 1625 as the next support for KLCI, upside resistant 1680.


Thursday 7 January 2016

The Sell off continues...

On the last trading day of year 2015, Hang Seng Index closed at 21914.40. At today's closing, HSI closed at 20333.34 (-647.47). Hong Kong market lost 1581.06 points since first trading day of the year, a shock after China stock market being suspended twice within four trading days. For FBM KLCI, it closed at 1692.51 last year and today, finished at 1655.13 (-12.84); lost 37.38 points within a week.

It is not a good start for the year; but hey, keep calm and start hunting for bargain stocks. It is not a good week if you've invested in stocks since beginning of the year. But for trading, the wild swing presents opportunities to make money. Watch your risk, cut losses quickly if you're on the wrong side of the trade; don't be greedy and be prepare to take profit if you see paper profit in your trade. We are sure with these two rules in mind, this is a week full of trading and money making opportunities.

At this stage, it is hard to pick stocks as the global market sentiments is pessimistic and full of negative news. We think holding index related ETF ( Exchange Traded Funds) is more appropriate at this moment. The rebound in index will moves index ETF, but not all individual stocks will follow.

We think can keep an eye on Index related ETF such as HK2800-Tracker Fund of Hong Kong which tracks Hang Seng Index; HK3084- Value Japan ETF Fund that follows Japanese market, HK2822 or HK2823- if you think it is still alright to bet on China's upside and lastly in Malaysia, MY:0820EA and MY:0823EA, ETF that tracks Malaysia and Hong Kong's benchmark index.


Monday 4 January 2016

Hello and Welcome to 2016!

Today is the first trading day of the year of 2016. Welcome to 2016 and we hope it is a good start of the year.

On last Thursday, DJIA closed at 17425.03, lost 178.84 on the last trading day of the year of 2015. Because of this, we expect Asian market to open lower on Monday morning. After that, how will market behaves on first trading day of the year? Open low and end up in positive territory by end of the day? Or open low and close lower at final trading hours? Are retail and institutional investors ready to back to stock market after the festive season?

We believe there will be a Chinese New Year rally in the next few weeks. Chinese New Year also known as Lunar New Year is a big celebration in China, Hong Kong, Macau, Taiwan, as well as Chinese Ethnic in Malaysia, Singapore and the rest of the world. However, only the mentioned countries and a few are entitled for public holiday.

This year's Chinese New Year- the year of Monkey falls on the 8th of February (Monday), which is just a month away. If there is a CNY rally, we think it's going to be a short and quick one. Profit taking will comes in before CNY as investors close off position to cash in profit.

Looking at Hang Seng Index, the monthly SMA-21782 is a crucial support/resistant. This meaning if market falls below 21782, further support we see is 20984. If market managed to hold firm above this level- 21782, it will try to test upside resistant at 22222.

As for KLCI Index, the first support we see for the coming trading week is at 1675, further 1650 and 1625. Resistant-1700 and 1725.