KLOFFE'S KLSE CI Futures Weekly Market Commentary

"NO SURPRISE" ANNOUNCEMENT FAILED TO STEAM UP THE CONTINUED BULL!

MARKET MOVEMENT

The Kuala Lumpur Composite Index Futures (FKLI) was traded from a low of 783.5 to a high of 826.7, a different of 43.2 index points. The direction on both cash and futures are mainly caused by anticipation of the "surprise" announcement to be made by Prime Minister in UMNO's Annual General Assembly.

The cash market continued to be supported by local institutions and retail players as they anticipated a uptrend. However, weak sentiment were seen later the week due to liquidating of stock positions by contra players.

In the futures market, activities still lack as investors switch to hold stock positions in the political linked and second third liners. The basis between cash index and futures index remain intact in the positive level as there are still two more weeks for June futures to expire.

For June futures, it closed at 813.0, a premium of 27 index points.

To recap, total contracts traded for the week were 12,005 contracts, an daily average of 2,401 contracts.The 20-day volatility stayed below 40% level. Total month end open interest stayed at 3,984 contracts.

MARKET OUTLOOK

The market will remain neutral to bullish. However, watch out for bumpy force sell dates in the week as contra players need to close out their position in the cash market.

The other factor that you might want to look at is the basis risk might be a factor that influence the futures index. Resistance would be at 821, 832 and 851 while support can be seen at 788, 763, 729 levels.

What is Basis Risk?
The risk that associated with the difference between the cash price of an underlying index and the price of the futures contract.

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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