Daily Market Reports Issued By Rakuten Trade Research : Page 234

Major markets closed mixed last week amid the continuing tension between the US and China coupled with the Eid Mubarak break in certain countries. The DJI staged an impressive rebound of 4.7% or almost 1,200 points to almost 26,000 with the hope that the feds may cut rates again soon.
The local bourse experienced a mild profit taking ahead of the Raya break. The FBM KLCI lost a mere 0.4% or 6 points for the week to 1,649.33. Finally, foreign funds flow turned positive for the 2nd week running of RM350.0m with YTD net outflow down to RM4.47bn.
Performance amongst the FBMKLCI components saw 9 gainers to 18 losers. Top 3 performers include Top Glove (+1.2%), PPB (+1.0%) and Nestle (+0.7%) while the top 3 losers were Genting (-2.8%), Sime (-2.2%) and SIMEPLT (-1.7%).

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US Dow Jones has rebounded close to 1,000 points for the last three trading sessions on the back of Federal Reserve Chairman Jerome H. Powell saying the central bank is prepared to act to sustain economic expansion if President Trump trade was weakened the economy. The comments were interpreted as such that interest rate cuts could be on the cards.
Foreign net buying has turned positive for the 4^th straight day which is a good sign.

As this is a shortened trading week for Malaysia with Raya Eid celebrations, we expect our market to also be in holiday mood and will see sporadic trading activity.

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Despite the recent concluded results season of which we reckon is within expectations, we noticed many analysts have become cautious as there were some rather apparent downgrade on forecasts among the FBM KLCI constituents.
We presumed such stance could be due to the prevailing trade standoff between the US and China. Amongst others, the plantation sector was the biggest victim with expectations being cut rather drastically.
As a result, earnings estimate for the sector have had been reduced from -1.9% to -7.3% for 2019. Notwithstanding this, we believe such move could be their part in managing expectations and if the planters are able to churn out better figures in the following quarters, upgrade could be on the cards again.

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Trump may have shot himself in the foot as his bullying tactics failed to yield any results so far. Instead, his antics have riled the Chinese so much so that, US firms in China may be under some scrutinization going forward.
Recently, Germany have had also condemned Trump’s tactics thus indicating his support is waning. With China unwilling to back down, we reckon global markets will continue to be volatile until investors are fed up with the whole process only then we can expect business as usual.

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Major markets closed mixed last week amid the continuing trade tension between the US and China. The DJI slumped 2.1% or 533 points to close the week below the 25,000 mark at 24,815.04.
The local bourse reversed its recent weakness to end the week on a positive note due to some portfolio realignment especially from the foreign funds.
The FBM KLCI gained 3.09% or 49.41 points to 1,650.76. Finally, foreign funds flow turned positive of RM48.81m to halt YTD net outflow to RM4.82bn. Performance amongst the FBMKLCI components saw 27 gainers to 3 losers.
Top 3 performers include TNB (+11.8%), Pet Gas (+8.6%) and Digi (+6.0%) while the top 3 losers were PChem (-3.14%), HLB (-1.35%) and SIMEPLT (-1.06%).

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