EDITION 180 | Sept 23, 2017


MALAYSIA  e-Biz

Market Outlook

LIST OF MARKET REPORTS:

1. Bursa Malaysia
2. Forex
3. Money Market
4. FBM KLCI Futures
5. Crude Palm Oil (CPO) Futures
6. Rubber Futures
7. KLIBOR Futures
8. Kuala Lumpur Tin Market (KLTM)
9. Gold Futures

BURSA MALAYSIA

Bursa Malaysia To Trade Sideways

By Mohd Khairi Idham Amran 

KUALA LUMPUR -- Bursa Malaysia is expected to trade sideways between the 1,760 and 1,770 levels next week as it enters a consolidation mode.  

Affin Hwang Investment Bank Vice-President and Head of Retail Research, Datuk Dr Nazri Khan Adam Khan said the local market is expected to move in tandem with its global peers in consolidating, following an announcement by the US Federal Reserve on trimming its huge balance sheet.  

He said the market is also expected to react to the US central bank’s indication of another interest rate hike this year.  

"This might put pressure, not only on Bursa Malaysia, but also global peers,” he told Bernama.  

For the week just-ended, the benchmark FTSE Bursa Malaysia KLCI lost 15.29 points to 1,771.04 from 1,786.33 last week, weighed on by a combination of the US Federal Open Market Committee meeting and long weekend factor.  

The market was closed on Friday for the Awal Muharram holiday.  

Total turnover declined to 10.4 billion valued at RM8.32 billion from 13.13 billion units valued at RM10.77 billion in the previous week.  

Main Market volume was flat at 7.71 billion shares worth RM7.88 billion from 7.71 billion shares worth RM9.86 billion.


FOREX: Ringgit Likely To Trade Lower Against Greenback

By Nurul Hanis Izmir

KUALA LUMPUR -- The ringgit will likely trade lower against the US dollar next week in hovering between 4.20 and 4.23 following the US Federal Reserve’s (Fed) hawkish announcement on Wednesday.  

Affian Hwang Investment Bank Vice-President and Head of Retail Research, Datuk Dr Nazri Khan Adam Khan said the local note, in line with other Asian currencies, would consolidate in reacting to among others, the Fed's US$4.5 trillion balance sheet trimming in October and an unchanged interest rate.

“The announcement has lifted the greenback, signalling an improved US economy. While the interest rate was kept at the current one per cent,  the Federal Open Market Committee members at the recent two-day meeting, did indicate a possible rate hike this year,” he told Bernama.  

However, he added, declining geopolitical pressures and slightly higher oil prices would cap losses in the local note.  

For the week just-ended, the ringgit moved between 4.1860 and 4.1960 against the dollar, impacted by geopolitical issues and mainly involving North Korea, as well as the performance of the US economy.  

On a Thursday-to-Friday basis, the ringgit was traded at 4.1960/1000  against the greenback from 4.1880/1910 last week.  

It appreciated against the Singapore dollar to 3.1052/1090  from 3.1128/1614 on Friday and improved versus the yen to 3.7308/7353 from 3.7648/7685.  

Against the euro, the ringgit was slightly higher at 4.9987/9039 from 4.9988/9041 and vis-a-vis the pound,  appreciated to 5.6617/6679 from 5.6873/6926.  

The market was closed on Friday for the Awal Muharram holiday.


Money-Market: Short-Term Rates Likely To Remain Stable

KUALA LUMPUR -- Short-term rates are expected to remain stable next week with Bank Negara Malaysia likely to offer tenders to absorb surplus funds from the system.

For the week just-ended, the overnight rate was quoted at 2.96 per cent, while the one-week, two and three-week rates stood at 3.02 per cent, 3.07 per cent and 3.11 per cent respectively.  

The central bank intervened on a daily basis to mop up surplus liquidity by conducting range maturity auction tenders, Qard tenders, Commodity Murabahah Programmes, repo tenders and reverse repo tenders.  

The total liquidity surplus in the conventional system for the week just-ended narrowed to RM27.75 billion from RM33.10 billion last week, while in the Islamic system, it declined to RM8.5 billion versus RM11.90 billion.  

The benchmark three-month interbank rate stood at 3.43 per cent.  The market was closed on Friday for the Awal Muharram public holiday.


KLCI Futures To Trade Sideways

KUALA LUMPUR -- The FTSE Bursa Malaysia KLCI (FBM KLCI) futures contract is expected to trade sideways in sync with the cash market next week, a dealer said.  

He said the key FBM KLCI is also expected to enter a consolidation mode in tandem with its global peers following the decision by the US Federal Reserve on trimming its balance sheet and an indication of another interest rate hike this year.  

On a Thursday-to-Friday basis, spot month September 2017 lost 15 points to 1,766, October 2017 slid 16 points to 1,765, December 2017 declined 12 points to 1,767 and March 2018 eased 11.5 points to 1,766.5.  

Turnover for the week decreased to 21,068 lots from 23,846 lots last week, while open interest narrowed to 35,488 contracts from 36,122 contracts.  

The  FBM KLCI ended the week 15.29 points lower at 1,771.04 from 1,786.33 last Friday.  

The market was closed on Friday for the Awal Muharram holiday. 


CPO Futures To Trade Lower

KUALA LUMPUR -- The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to trade lower next week on the back of a high stockpile and on a technical correction, said a dealer.  

Interband Group of Companies Senior Palm Oil Trader, Jim Teh said however, the losses would be capped by buying interest from China, India and Pakistan, ahead of festive seasons.  

"The CPO market is likely to consolidate between RM2,500 a tonne and RM2,600 a tonne due to the high price of above RM2,700 a tonne at the moment," he told Bernama.  

CPO prices were mostly lower in the holiday shortened week, mainly influenced by soybean oil prices and on anticipation of the release of export data.  

On Wednesday, Intertek Testing Services said Malaysia's palm oil products export for first 20 days of September rose 25.4 per cent to 852,206 tonnes from 679,539 tonnes, in same period last month.  

Meanwhile, on a Thursday-to-Friday basis, October 2017 fell RM146 to RM2, 748 per tonne, November 2017 decreased RM126 to RM2,735 per tonne, December 2017 shed RM98 to RM2,737 per tonne and January 2018 depreciated RM79 to RM2,740 per tonne.  

Weekly turnover declined to 221,608 lots from 311,631 lots last week and open interest was down to 261,316 contracts versus 282,785 contracts.  

On the physical market, September South was RM135 lower at RM2,765 per tonne from last Friday's RM2,900 per tonne.  

The market was closed on Friday for the Awal Muharram holiday. 


Rubber Market Likely To Be Quiet

KUALA LUMPUR -- The Malaysian rubber market is likely to continue seeing quiet trading next week, amid a lack of fresh leads and with most traders watching closely the movement of the rubber futures on the Tokyo Commodity Exchange (TOCOM), a dealer said.  

TOCOM, which normally governs the direction of Malaysian rubber, eased 0.9 per cent for February 2018 delivery at 210.2 yen per kg, after gaining as much as 217.4 yen earlier in the day.  

On a Thursday-to-Friday basis, the Malaysian Rubber Board's noon price for tyre-grade SMR 20 fell 49 sen to 625.5 sen a kg from 674.5 sen kg, while latex-in-bulk declined 50 sen to 516.0 sen a kg from 566.0 sen a kg.  

The 5 pm unofficial closing price for SMR 20 went down 33.5 sen to 631.0 sen a kg from 664.5 sen a kg and latex-in-bulk was 45.5 sen lower at 514.5 sen a kg from 560.0 sen a kg.  

The market was closed on Friday for the Awal Muharram holiday. 


KLIBOR Futures To Remain Quiet

KUALA LUMPUR -- The three-month Kuala Lumpur Interbank Offered Rate (KLIBOR) futures contract on Bursa Malaysia Derivatives is likely to remain quiet next week in the absence of market catalysts.  

For the week just-ended, the market was untraded with open interest remaining at nil.  

On a Thursday-to-Friday basis,  October 2017, November 2017, December 2017 and March 2018 stood at 96.53, 96.52, 96.50 and 96.50 respectively.  

The underlying three-month KLIBOR on the cash market remained at 3.43 per cent on Thursday.  

The market was closed on Friday for the Awal Muharram holiday.


KLTM Likely To Trade Higher

KUALA LUMPUR -- The Kuala Lumpur Tin Market (KLTM) is likely to trade higher next week with the metal price moving between US$20,500 per tonne and US$20,800 per tonne, on low stockpile for the commodity, dealers said.  

A dealer said looking at the fundamentals, the short supply and stable demand for the metal should support the tin price.

“KLTM will also likely move in line with the performance of the London Metal Exchange (LME) tin market.  

“It will in addition monitor the tin markets in Indonesia and China, which are among the largest producers in the world,” he told Bernama.  

According to the International Tin Research Institute (ITRI), tin appears headed for a 22,000 tonnes deficit for 2017.  

The KLTM was closed on Friday for the Awal Muharram celebration.  

For the week just-ended, the KLTM finished US$100 lower at US$20,650 a tonne compared with US$20,750 a tonne last Friday.  

Weekly turnover declined to 141 lots from 149 lots last week.  

The premium between the KLTM and LME narrowed to US$20 a tonne against US$210 a tonne last Friday.


Gold Futures To Trade Slightly Bearish

KUALA LUMPUR -- Gold futures contract on Bursa Malaysia Derivatives is expected to trade slightly bearish next week, tracking similar performance on benchmark New York Commodity Exchange (COMEX)  gold futures market, a dealer said.  

He said last week, the trading of the precious metal on COMEX declined to its lowest in nearly four weeks, after the Federal Reserve (Fed) signalled it was on track to raise US interest rates again in December.  

“The upside of Bursa gold’s movement is definitely limited on the hawkish comments by Fed and the strong ringgit, thus we expect the ringgit-denominated gold futures to be slightly bearish on next week,” he said.

On a Thursday-to-Friday basis, Sept 2017 declined 68 ticks to RM175.80 per gramme, Oct 2017 dropped 48 ticks to RM175.80, Nov 2017 erased 58 ticks to RM176.00 and December 2017 was 36 ticks lower at RM176.00.  

Weekly turnover fell to 12 lots worth RM212,715 from 22 lots worth RM412,780 recorded in the previous week while open interest narrowed to 600 contracts from 762 contracts.  

The market was closed on Friday for a local public holiday.