Review of Bursa Index in 2019

2019 had been a tough year, especially for our FBMKLCI. Malaysia seems to drop non stop. With the Vision 2020 starting today, will we be seeing flying cars in our country? And our FBMKLCI will fly too? In this post, i am going to run through the Bursa indices and hopefully we can spot some good indices that will outperform our index, followed by the counters.

But before that, lets see how our FBMKLCI and other bursa indices perform. Energy performs the best with 51%, construction (34%) and Technology (29%). The worst performance goes to Financial Services (-11%), followed by Industrial Product & Services (-8%) and Property (-5%).

2019 Bursa Indices YTD Performance

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FBMKLCI MARCHing April

March had been a very good month for our FBMKLCI. Why do i say this? In March 2017, we have a lot of big political events happening in Malaysia. Let me try to recap it. There are basically 3 big political events happening in March 2017.

On 1 March 2017,  Saudi Aramco signed an agreement with Malaysia's national oil company, PETRONAS.[1]  The related Oil and Gas counters are SENERGY, DIALOG.

Saudi Aramco signed an agreement with PETRONAS on participation in RAPID on 1 March 2017

On 22 March 2017, E-commerce giant Alibaba Group is setting up a trade and logistics hub in Malaysia's new Digital Free Trade Zone (DFTZ).[2][3][4] Jack Ma visioned to build an Electronic World Trade Platform (eWTP) - a more inclusive, free and innovative global trading platform for SMEs, the young and consumers. Jack also praised Malaysia is a business-friendly and much more efficient than he thought. The hub, expected to be launched end-2019, "will function as a centralized customs clearance, warehousing and fulfilment facility for Malaysia and the region, to deliver faster clearance for imports and exports," Alibaba said in a statement. 

The related logistics counters are, GDEX, ILB, TNLOGIS, NATWIDE, FREIGHT, COMPLET, MAHB, POS. The related software counters are EFFICEN, MPAY, SEDANIA, REV, SYSTECH, CUSCAPI, DATAPRP.

Malaysia PM and Alibaba Jack Ma in DFTZ on 22 March 2017

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FBMKLCI - No Sign of Turning Back

Our FBMKLCI showed no sign of turning back, not even a short glimpse~ Today (20 March 2017) is our FBMKLCI's 3rd day's bullishing up day. And the volume just could not stop getting higher and higher. 

FBMKLCI Daily Chart

After the agreement between PETRONAS and Saudi Aramco on 1 March 2017, foreign funds had been actively buying in, which we can observe through the statistics below:

Market Participation[1]

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Bull Market Back Backed by Foreign Funds?

On 1st March, Saudi Aramco signed an agreement with Malaysia's national oil company, PETRONAS. The deal will allow Aramco's to have equal ownership in selected ventures and assets of the RAPID project within the Pengerang Integrated Complex (PIC)[1]. The RAPID project includes a refinery with the capacity to churn out 300,000 barrels of oil a day, a cracker plant and a petrochemical complex with an annual production capacity of 7.7 million metric tons. The refinery begins operation in 2019.

Saudi Aramco signed an agreement with PETRONAS on participation in RAPID

The partnership marks the beginning of a strategic relationship providing RAPID with high-impact strengths from both Saudi Aramco and Petronas. “On the occasion of the historic state visit to Malaysia by King Salman, Saudi Aramco is proud to be entering into a deeper partnership with our world class partner Petronas via the RAPID project,” Aramco’s president Nasser said. “Together with Malaysia, the Southeast Asia region offers tremendous growth opportunities and today’s agreement further strengthens Saudi Aramco’s position as the leading supplier of petroleum feedstock to Malaysia and Southeast Asia.”[1]

After since, our index had been quite bullish. Notice of the support at 1690.93? The chart bounced off the support on the 1 March 2017 and after that, it continued its uptrend. We can also draw an uptrend channel after the V-shape rebound in the beginning of 2017. To add some spice to that, SMA50 had crossed over SMA200, which confirms that the bull is back~

FBMKLCI Daily Chart

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Summary of January 2017

Our FBMKLCI had been in raging mode since the first day of 2017, opening at 1,636.94 and continue to move upwards like there is no tomorrow. Maybe the year of rooster really fly off~ Lets take a look at our FBMKLCI daily chart.

FBMKLCI Daily Chart

After a V-shape rebound, our index had been in an uptrend mode. Till now, it had surged up around 4%. Notice i had 2 simple moving averages? SMA50 and SMA200. Our market had broken the sideway pattern and seems there's a small bull run. And not to mention our FBMACE Daily Chart as well.

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Sell in May and Go Away?

Sell in May and go away... Seems like it is a mixed myth and fact throughout all these years. Will this myth continue to happen in this year? First, let's look at the FBMKLCI monthly chart and try to correlate...

FBMKLCI Monthly Chart

From the past year statistics, 2013's May shows a bullish month. 2014's May show a doji with thin body and long tails. For 2015's May, it is a big bearish engulfing which in the following months drag down the FBMKLCI to the lowest of 1503.68 in August 2015. In my previous post[3], i still remember for the month of March, there is a bullish engulfing, and this month April it forms a bearish engulfing. The market is totally unpredictable. 

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FBMKLCI - Malaysia BULLeh

Let's kick start the April post with participation statistics for our FBMKLCI. Let's focus at the foreign funds.

Bursa Malaysia Trading Participant Statistic for the Past 8 Weeks [1]

For the month of February and March, foreign funds had been in net buy position, RM433.2 Mil and RM6,081 Mil for respectively. for the past 2 months, the foreign funds had been actively trading in our FBMKLCI. We can also track the daily participation statistics through this link. If the foreign funds are coming in, meaning to say our MYR will be stronger and stronger.

The reason being, if the foreign funds want to invest in Malaysia, first, they will take their currency and exchange it to MYR in order to invest in Malaysia. So when the MYR's demand is getting higher and the supply is still the same, that's when we see the MYR getting stronger. With the weekly chart, there is a huge bearish engulfing. So i expect the MYR to get further stronger and might breach 3.80.

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FBMKLCI - Bull In Charge Now and Plantation to Flourish?

FBMKLCI had been performing quite well for the past few weeks. Lets take a look at the monthly chart.

FBMKLCI Monthly Chart

When we look at the monthly chart, actually we can see a head and shoulder pattern. This head and shoulder pattern is a bearish pattern. The neckline is also the support, stands at 1670. The difference between the neckline (1670) and the highest point (1896) is 226. So from the neckline, the index is expected to break to 1444. (Luckily it did not go down to 你死死死 number； if so, we can collect a lot of fundamentally stock~ haha) I look at the support of 1670 as very important, after few months of hovering around there, finally in March 2016, we are breaking through, hopefully in April, we can firmly stand above the support line.

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FBMKLCI to Rebound Soon?

After 4 weeks in 2016, our index suffers a lot of setbacks and continue to slide down after the windows dressing in December 2015. Panic, panic everywhere. Regardless our local market, foreign market also facing the same turmoil. I truly felt that the market is volatile, headless creature directionless. It is neither bull or bear, they call it Monkey Market (this year is a Monkey Year for Chinese), as the chart bounces up in a day, and bounces down in another day. 

Mr Monkey Market

In this post, i just want to gather and share some of my view regarding to the local market and some of the global market. I need to confess that my macroeconomic view is not good. But just hear me out. Hope you can gain some knowledge from my sharings. At least there are some things that we should be take note of prior to making any investment decision.

1. FBMKLCI

Lets look at our FBMKLCI for this year.

FBMKLCI Daily Chart

This is a FBMKLCI daily chart. The chart had been in a bear market. In 1 January 2016 until 22 January 2016, index had dropped from 1686.82 to 1625.21, a drop of 3.79%. Look at the SMA200 had cross over SMA50 in June 2015. The gap between SMA50 and SMA200 is quite far. Currently the index is oversold by looking at RSI and the Bollinger Band on 21 January 2016. On Friday, there is a bullish engulfing and our index rebounded to the middle band partly because our our Bank Negara Malaysia's announcement on 21 January 2016. Our Bank Negara Malaysia announces the decrease in the Statutory Reserve Requirement (SRR) Ratio from 4.00% to 3.50%, effective from 1 February 2016[1].