Thursday March 5, 2009.

DAILY MARKET REPORT.

Wednesday Markets Closing Prices.


KLCI 866.93 up 1.81 or 0.21%.
DJIA 6,875.84 up 149.82 or 2.23%.
Crude Oil US$45.38.
April CPO RM1,942.
Ringgit 3.7110.


LOCAL NEWS.

The government has ruled out retrenchment fund for now.

MAS Bhd, RM2.60 SELL, stands to lose around RM2.8 billion in hedging costs as MAS has hedged 64% of its fuel requirements for FY09 at US$100 per barrel and 40% for FY10 at US$95 per barrel. MAS use up to 16 million barrel of oil per year.

WORLD NEWS.

China to unveil new economic stimulus package.

World markets recovered on the renewed hope that the new stimulus and Chinese economy recovery will fuel demand.

Analysis - The U.S. dollar is still too strong either by design meaning currency policy or because of risk aversion for the world economy to stage a meaningful recovery especially for the Asian exports dependent economies as the supply were abundant and the demand slumping.

Only the exports led recovery in the U.S. with weaker dollar will make the rests of the world exports led economies recover and the commodities prices too. Otherwise a built up in inventories will happen again with no external demand unless the domestic demand can pick up the slack. The U.S exports led recovery with weaker dollar will require a lot of exports products from the rest of the world that will feed on itself to fuel sustainable growth. As it is now, Asian countries weaker currency ex-Japan will only cancel each other out in term of competitiveness.

Besides all of this, the U.S. banking system must be fix first. Only then, can the real economy recovery begin.


By:
Kamel bin Mohd Yusoh.
Kenanga Investment Bank Bhd.
013-6306544 or 03-21634549/50.
March 5, 2009.