Wednesday, August 17, 2011

Volatile Local Equity Market, 7 - 13 August 2011 Review

Equity
The local equity market was extremely volatile as the Wall Street crashed 6% after S&P downgrades its AAA rating to AA+ for the first time since World War 1. Subsequently, it rebounded sharply on the flowing day (Tuesday) but endured another round of massive selling on Wednesday. The trend started to stabilize since then, but the recovery remained choppy. For the week, the FBM KCLI plunged 4.6% or 40.8 points to close at 1,483 points. It managed to outperform the regional as the MSCI Asia Ex Japan fell 9.3%. Average daily trading value for the week jumped 50% to RM2.98bn, which was 67% above the three-month average of RM1.79bn.

Equity Market Outlook
We continue to believe the market is going to end the year with a positive note. We remain bullish on the market due to the ongoing economic and political reform. For the coming week, we expect the market continue to trend up as the market stabilize. We see more value in the market versus one month and start to position for the year end rally.

Equity Market Strategy
Stock picking is still our strategy with preference for liquid fundamental stocks on weakness.




Source: ING Funds Berhad

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