Market Reports

Regional markets were all in positive territory with US markets hitting record high on the back of the trade war truce between US and China during the recent concluded G20. The DJI continued its positive close rising 0.64% or 169.21 points to 26,717.43.

The FBM KLCI continued its bullish run rising 7.01 points for the week to 1,683.62. Foreign funds flow were net positive for the week with RM308.79m inflow. Performance amongst the FBMKLCI components saw gainer 16 gainers to 12 losers.

Top 3 performers include PChem (+3.68), RHB (+3.58%) and Axiata (+3.00%) while the 3 losers were Maxis (-2.96%), PMetal (-0.90%) and HLFG (-0.64%).

• The simmering trade war between the US and China may have seen to be off the boil at least for now. Though nothing concrete has been laid on the plate, many observers expect that both parties will resist in making anymore irrational moves on tariffs.
• Therefore we believe investors are now less jittery and may be pouring funds back into equities. Meanwhile, Saudi Arabia and Russia agreed to cut oil production which should be positive to crude prices as the Brent jumped by US$1.20 to close at almost US$66/barrel.

• All eyes will on the impending discussion between Trump and Xi during the G20 Summit today as many will be hoping for the end of the prevailing trade war.
• Meanwhile with the Federal Reserve less dovish stance, we would expect investors to remain sidelined until a clearer picture emerges. Expect the FBM KLCI to trend at a narrow range of between 1,670-1,680.

• Positive comments from President Trump about the imminent discussion with China on tariffs should lend a positive note to the equity markets.
• With the Federal Reserve recent less than dovish stance, funds again appear to have unlocked some of their bond holdings with the US 10-year Treasury yield surpassing the 2.0% mark to close at 2.05% yesterday from around the 1.98% before.

1. Meanwhile, we would expect there to be some accumulation on equities ahead of the US/China talk as sentiments seems to be rather confident.

• It is going to be interesting come the semi-annual review of the FBM KLCI components. Telekom Malaysia which was omitted from the benchmark index have has staged a remarkable recovery of sorts with its share price currently at RM4.11 from the low of RM2.11 barely a year ago.
• If this is maintained, we believe Telekom Malaysia would be readmitted to the FBM KLCI with its market capitalisation now stands at RM15.6bn.