Daily Market Reports Issued By Rakuten Trade Research : Page 233

Reflecting the prevailing scenario as we are entering into a lower interest rate regime, the MYR has actually performed rather credibly against the greenback.
For the past month, the local currency strengthened from the RM4.20/US$1 level to the current MYR4.14/US$1.
We reckon the MYR will continue to strengthen vis-à-vis the US$ and expect it to re-test the MYR4.00/US$1 over the next few months.

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Crude oil price has had a very volatile month on the back of the ongoing tension between the US and Iran. As a result, crude oil price trended within a wide band of US$60 to US$69 per barrel over the last month. We expect recent proposed sanctions on Iran will inject more price volatility.
With crude price currently at US$65/barrel, we expect there to be more upside with President Trump being the main instigator. With this, the Oil & Gas sector should be back in the limelight and amongst others our favourites are Serba Dinamik, Straits Inter Logistics, Hibiscus, Dialog and Yinson.

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Regional markets were all positive with the expectation of a US rate cut and the much anticipated upcoming G20 meeting between Trump and Xi on the on-going trade tension between both US and China. The DJI continued its positive close surging 2.3% or 606.6 points to 26,719.13.
The local bourse FBM KLCI continued its fine run rising 43.8 points for the week to 1,682.23. Foreign funds were net positive for the week with 28.21m inflow. Performance amongst the FBMKLCI components saw overwhelming gainer with 25 to 3 losers.
Top 3 performers include TNB (+9.11), Genting (+7.52%) and Axiata (+7.22%) while the only 3 losers were CIMB (-0.38%), Maybank (-0.22%) and KLK (-0.08%).

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It is apparent that we are in the midst of entering another era of low interest rate regime. Though the Federal Reserves maintained the US rates for now, it is highly likely that rates will slide going forward as per the US 10-year Treasury yields which have dipped below the 2.0% mark to 1.97% currently.
As a result, we would expect foreign funds to return to take advantage of higher returns from our 10-year MGS now at 3.69%. We also anticipate the Ringgit to strengthen in line with the declining rates in the US.

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US stock rebounded strongly yesterday after President Donald Trump indicated that there will be an extended meeting with President Xi at the G20 summit.
The expected meeting has boosted market participants’ confidence of trade deal happening. However, should the meeting does not yield meaningful results market would take a hit.
Furthermore, investors are also keeping an eye on the upcoming FOMC meeting and statement on the interest rate direction for the year.

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