KLOFFE'S KLSE CI Futures Weekly Market Commentary

MARKET MOVEMENT

The Kuala Lumpur Composite Index Futures (FKLI) was traded from a low of 720.0 to a high of 750.5, a tighter range of 30.5 index points. The week started off higher on anticipation of positive notes to be made by Deputy Prime Minister Datuk Seri Anwar Ibrahim on economic measures on the week. On Monday, the March futures contract resided at the high 740s level.

The futures market has recorded week high and week low on Tuesday as investors were awaiting and react on the statements made by Deputy Prime Minister. Due to high expectation of investors being let down on the statement, aggressive selling in the afternoon helped push down the futures market to settled at 727.0.

On Wednesday, the futures market was once again traded at premium as Bank Negara force banks and finance companies to merge as finance stocks rally. The March futures ended at 738.0.

The futures market saw roll over activities on Thursday and Friday as retails sidelined. As a result, new daily open interest was recorded at 18,000 level. With tight trading range of only 5.5 index points on Friday, the futures closed at 733.6. The ringgit closed at 3.5750 on Friday.

To recap, total contracts traded for the week were 19,969 contracts, an daily average of 3,994 contracts. The 20-day volatility stayed at 30-40% level, the lowest since beginning of this year. However, total open interest stayed above 17,000 level, the highest ever recorded.

MARKET OUTLOOK

The market is likely to remain sidelined. As an evidence of this stagnant market movements, the 5 day annualized volatility for the underlying stayed below 10%. However, I believe that next week would see slight downside of the market as quarterly effect would take into consideration. Main movement will still be limited or stagnant.

For March futures, resistance would be at 736, 738, and 744 while support can be seen at 722, 727, 730 levels. I expect the market outlook to be neutral and slightly bearish.

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.

(mshu@tm.net.my)
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