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?

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.

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.

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?