Daily Market Reports Issued By Rakuten Trade Research : Page 237

We believe regional markets are set to remain volatile so long Trump maintains his “bullying: stance against China and the rest of the world. Recent developments on Huawei sets the tone for other Chinese companies which would create continuous uncertainties surrounding the 2 largest economies as US companies may also be impacted.
As for the local bourse, we reckon prevailing consolidation to persists with the lack of catalysts. Psychological support is seen at the 1,600 mark for the FBM KLCI.

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Major markets ended on negative territory last week following the escalating trade tension between US and China. The major Asian markets declined while the Dow Jones Industrial Average index advanced 1.7% or 439 points. Meanwhile, the FBM KLCI closed 0.27% higher to end the week at 1,605.36 points.
Weekly foreign funds flow continued with RM1.18bn net outflow pushing YTD outflow to over RM4.49bn. Performance amongst the FBMKLCI components saw 14 gainers to 13 losers.
Top 3 performers include DIALOG (+7.14%), TOP GLOVE (+5.78%) and HARTA (+5.59%) while the top 3 losers were SIMEPLT (-4.68%), AIRPORTS (-1.90%) and MISC (-1.65%).

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Crude oil price strengthened to USD72.80/barrel as tension in the Middle East escalates. Crude oil price have had gained by more than 35% year to date from USD53.80/barrel as at beginning of the year.
If prevailing price is sustainable, we reckon more crude oil related jobs could be in the offing hence should boost the O&G players. Companies like Dialog, Hibiscus, Dayang, Uzma, Serba Dinamik and Straits Inter Logistics are some of our favourites.

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Leong Hup International Bhd will be listed on Bursa Malaysia today. The company is one of the largest poultry based player in the country.
As the biggest initial public offering (IPO) so far this year, analysts are rather positive on the company with fair value ranging from RM1.27 to RM1.43 from its IPO price of RM1.10/share.
Leong Hupâ€™s pre-listing market capitalisation is tagged at RM4bn.

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A more dovish statement by Trump on the trade war with China had sent positivity on Wall Street thus we may witness regional markets to trend higher today.
Locally the equity market is expected to see some bargain hunting activities with the FBM KLCI to test the immediate resistance at 1,620.
Malaysia being the worst performer on both currency and equity within the region is not expected to see any immediate reversal in fortune but we expect foreign direct investment (FDIs) especially from China will lent support on the stock market and currency in due course.

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