Friday March 13, 2009.

DAILY MARKET REPORT.

Thursday Markets Closing Prices.


KLCI 838.39 down 11.98.
DJIA 7,170.06 up 239.66 or 3.46%.
Crude Oil US$47.03.
May FCPO RM1,920.
Ringgit 3.6900.


LOCAL NEWS.

Najib keen on the old NEP spirit for all of eradicating the poverty regardless of race etc etc.

Malaysia credit rating not affected by 7.6% fiscal deficit says Najib.

Malaysia January 2009 Industrial Production Index (IPI) plunged 20.2% year on year.

Malaysian government expect no meaningful growth until 2011. Meanwhile, MIER forecast a worst cast scenario GDP contraction of 3.8% this year and the economy to fully recover only in 2012. Moreover, RAM expected Malaysian economy to experience a technical recession for the first half of the year.

Analysis - Our RM528.8 billion (FY2008 real GDP) exports dependent economy could easily shrink to RM500 billion or 5.4% contraction in FY2009 as the services sector which represent 55% of 2008 GDP and manufacturing which represent 29% of 2008 GDP shrinks as evidenced by the exports and IPI numbers so far this year. The construction sector which represent only 3% of 2008 GDP can't contribute much through RM12 billion (RM7b plus RM5B) pump prime effort out of RM67 billion as announced in stimulus plan for 2009.

The government and the world should try the solutions as outlined in the Year 2009 Stock Market Outlook dated January 5, 2009 and posted on this website to prevent a full blown world economic depression.


WORLD NEWS.

World Bank expected the global economy to shrink 1 to 2% this year.

U.S. stocks post biggest three day gain since November; oil, bond rally but doubts on staying power remain.

U.S. jobless rate near 10% according to the Labor Department website inclusive of the unaccounted 2.1 million jobless not included in the poll and the U.S. 1Q 2009 GDP expected to shrink 5.3% but it can be as bad or even worse than Japan which yesterday revised 4Q08 GDP to minus 12.1% on an annualized basis.

The DJIA can mirror the Nikkei index which hit the all time high above 38,000 level but now only at around 7,000 level after the real estate crash in Japan. The American economy and financial markets currently experiencing exactly the same symptoms as the Japanese did 20 years ago. For the next few years the DJIA can be expected to be at the level last seen in 1987, based on the economy outlook.


By:-
Kamel Bin Mohd Yusoh.
Institutional Dealer.
Kenanga Investment Bank Bhd.
March 13, 2009.
013-6306544 or 03-21634549/50.