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?
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