Monday , September 28, 2009

WEEKLY MARKET OUTLOOK.

Friday Markets Closing Prices.

FBMKLCI 1217.39 down 0.67.
Nov Fcpo RM2,186.
Ringgit 3.4700.
DJIA 9,665.19 down 42.25 or 0.44%.
Crude Oil US$66.02.
Gold US$991.60.
Natural Gas US$3.98.

STOCK MARKET OUTLOOK.

Local bourse is expected to trade in a tight trading range before the Federal Government unveils the Budget for 2010 in October and as investors wait for the outcome of the latest political developments in the country.

The FBMKLCI valuations looked a bit stretched at forecast PER of 22X and gross dividend yield of 3.2% for FY2009 but based on forecast earnings and dividends for 2010 and 2011, healthy economic numbers and strong banking system, the local bourse still have an ample of room to move up further.

In the U.S., the rally in stocks, which stumbled in recent days about the economic recovery and continued government stimulus, will be tested next week by crucial data on growth and jobs according to Reuters newswire.

Last week, stocks slid as world central banks said they would scale back infusion of U.S dollars into their banking systems and the Fed’s decision to slow purchases of mortgage debt.

Meanwhile, the G20 were united on bank rules and aligning policy toward achieving a more stable banking system and a stronger global economy.

STOCK MARKET STRATEGY.

BUY and ACCUMULATE FBMKLCI linked and quality stocks on market weakness toward the support level to positions for further stock market recovery in the coming months and next year.

The upcoming re- listing of telecommunication company MAXIS before the year end , will provide further interest in the local stock market especially for quality stocks with strong track record of earnings and dividends growth.

FbmKlci will probably trade around 1200 to 1300 level for the rest of the year and have the potential to hit at least 1331 to 1400 level in 2010 and 1525 the latest by 2011 based on further global economy recovery as I forecasted the future earnings and dividends will grows at least between 15% to 30% for 2010 and 2011 respectively.

I predicted, a very high possibility of earnings and dividends surprises on the upside as a results of a very strong political will power and concerted effort worldwide to continue implementing the correct fiscal, monetary and currency policy, to be the catalysts for the local mart to rally strongly.

FBMKLCI TECHNICAL ANALYSIS.

Immediate Support Level at between 1197 to1202.
Next Strong Support Level at between 1150 to 1160.
Next Resistance Level at between 1220 to 1230, than at between 1250 to 1260 level.
Psychological Resistance Level at 1300.
Next Target Level at 1331, 1525, 1661.

Sincerely by:-

KAMEL BIN MOHD YUSOH.
INSTITUTIONAL DEALER.
KENANGA INVESTMENT BANK BHD.
013-6306544 OR 03-21634549/50.