KLOFFE'S KLSE CI Futures Weekly Market Commentary

MARKET MOVEMENT

The downgrade of Composite Index heavyweight component stocks by Standard and Poor and Moody sent the Index Futures and cash market to a three day drop. However, with late afternoon buying on Friday for window/book dressing purposes, the cash market and index futures managed to close at a higher price from the previous day. The index futures and cash market closed at 566.9 and 560.96 respectively, a premium of 5.94 points.

With this quiet market, the index futures were traded at expected rangebound of 549 to 580.5. Volume of futures for the four festive day "mood" were exceptional quiet with 6,410 contracts traded on futures market, an average of 1,603 contracts daily.

As depicted on the "Price Movement" graph, the last few trading days were quiet and traded in tight range as festive "mood" silently took place. Open Interest, on the other hand increased as an evident of roll over activities. The Open Interest reached record high on Thursday at 13,470.

MARKET OUTLOOK

With 3 days prior to expiration on December contract, roll-over activities would aid a slight increase in volume next week. December contract would closely follow the cash market as they converge on this coming Wednesday.

January contracts should be leading the way with a rangebound of 530 and 600. It might be a tighter range as the 5-day annualised volatility has dropped tremendously below 30%.

With festive season "mood" still around, don't expect the market to be volatile!

DISCLAIMER
The weekly market commentary has been compiled by Shu, Meng Chan (article writer) for private views only. The weekly market commentary articles are being released for the interest of Shu, Meng Chan only and should not be considered investment advice. There is no warranty or representation expressed or implied by Shu, Meng Chan as to the the accuracy or completeness of the commentary herein. The content of the articles will not reflect the general view point of the described (KLOFFE)Futures Exchange. Shu, Meng Chan will not be liable for any action taken by viewers upon reading Shu's Corner KLOFFE's Weekly Market Commentary.

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