Malaysia cut interest rate to 3%

Bank Negara Malaysia (BNM) decided to cut Overnight Policy Rate (OPR) to 3 percent after the meeting today. This is the first time interest rate cut after 7 years from Global Financial Crisis. Is Malaysia moving into a low or zero interest rate trend soon? Perhaps it is time to hunt for affordable properties or quality stocks in Malaysia market! 

When the news was released, July KLCI futures was trading at 1660.0 (+2.0); range of the day was traded between 1654.0-1662.5 (8.5) while cash market was at 1658.31 (+4.34). As for Ringgit, 1USD is equivalent to RM3.98. 

Resistance ahead

It was a choppy week again for the market. The range of the week for Hang Seng Index spot futures was traded between 19967-20835 (868); while for KLCI Index futures, trading range was between 1704.5-1723.0 (18.5).

For those who are holding stocks, there might be no big difference in price fluctuation, unless the speculation stocks you are holding moved dramatically. For those who are in index trading, it is a good opportunity to make money provided you stand on the right side; if not stay away from volatility if you couldn't take it. It could be a bored session in the market if the stocks you are holding is not moving yet. But, be patience.

We see Hong Kong market might consolidate between 20000-21000; and for KL market, index will range between 1700-1730 in short term. The market need catalysts to break the upside resistance or downside support...

Ringgit is strengthened against USD again as we can see 1USD~RM3.88 today. We will monitor the currency market closely.

Since we just bought a property last week, we'll be spending more time in our new portfolio compare to the current market. However, we are trying to be multitasking so we wouldn't miss out any making money opportunity.

Market slowly moving up...

Looks like market is holding well above 1700 for KLCI Index and for Hang Seng Index, holding well above 20300. Is the bull getting tired? If you are holding shares which has paper profit, will you take profit now or wait a little longer? Maybe market might move differently after the Brussels Attack this afternoon. 

Hang Seng Index spot futures lost 68 points finished at 20607; cash market ended at 20666.75 (-17.40) at today's closing. FBM KLCI Index gained 6.39 points settled at 1724.75 while March futures ended up 4.50 points at 1724.00 on Tuesday evening. 

We see immediate resistance for KLCI Index at 1725. Next target 1750. Any correction will send market close to 1700. For HSI, immediate resistance is seen at 20850. If market can break above this level, there is a chance market will retest 21000. On the downside, supports at 20300, further at 19800.

On a separate note, USD is soften. We managed to see 1USD~RM3.99 today. While there are so many analysts out there predict whether is now the beginning of bull market or continuation of bear market, we think it is ok to stay invest in stock market and occasionally hedge against the futures market. Meanwhile, we had set aside some capital for property market too, although it is not cheap to get one now. If not now, then when?

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?

US rate hike

The Federal Reserve had been talking about raising interest rate for months. We'll only know whether this ongoing topic will becomes a reality in coming December.

The US dollar has been the best performing currency for the year. Trading at 1USD= RM4.294 today, year to date Ringgit is almost 21 percent weaken against USD.

If the rate hike is confirmed in December, we are not surprised to see US Dollar surged above RM4.50 in short term. However, US dollar had rallied for a year. Short term correction might sent USD/RM below RM4, says around RM3.80. 

Since HK dollar is pegged to US dollar, we will convert more HK dollar for our Hong Kong portfolio if Ringgit is strengthened.

Ringgit Malaysia

Most currencies devalued against USD lately, but Ringgit Malaysia (RM) has been the worst performing currency among South East Asia currencies. As of today, 1USD is equivalent to RM4.27 whereas in August 2014, USD/RM was 3.15; a total devalued of up to 35%. It is a good news if you are holding USD. But, as a Malaysian, our purchasing power had decreased. 

While RM was strong few years back, we took the opportunity to travel overseas. Not only that, we converted RM to a basket of foreign currencies; SGD, AUD and HKD just to name a few. 

We've converted our SGD back to RM and made a small profit. We are still holding our foreign currencies and not consider to add on for the time being, unless it comes to an attractive level. We will continue monitoring the basket of currencies and make decision according to market condition.