Monday, January 30, 2012

Daily Dow Jones: A Breakdown Below 10-Days SMA & Mid Bollinger Band Supports Will Spur More Selldown

Wall Street review: Dow Jones drops 74 points on weak 4Q11 GDP and home sales
After tumbling as much as 104 points, the Dow Jones end 74 points lower to 12660. The decline was triggered by a weaker-than-expected 4Q11 GDP report and persistent anxiety looming over Greece’s ongoing negotiations with private-sector creditors in an attempt to reduce its debt burden. Without an agreement, the country jeopardizes its access to bailout funds and might not be able to make a €14 billion debt payment that is due on 20 March.

Sentiment was also dampened by Fitch’s downgraded of the sovereign debt ratings of five European countries, including Italy and Spain, which took the biggest hits.

Daily Dow Jones: A Breakdown Below 10-Days SMA & Mid Bollinger Band Supports Will Spur More Selldown
DowJones30-01-2012



Source: StockCharts.com

Sunday, January 29, 2012

KLCI Lower Liners And Penny Stocks Will Continue To Shine

Bursa Recap: KLCI dips 3 points to end -0.1% wow
Asian markets ended cautiously higher last Friday, as investors awaited the outcome of Greek debt talks and U.S. 4Q2011 GDP. However, KLCI eased 3 points or 0.2% to end at 1520.9 on mild profit taking activities on bigcaps.

Volume increased to 2.28 billion shares worth RM1.85 billion against Thursday’s 1.96 billion shares worth RM1.7 billion amid greater retail participation especially after external sentiment improved with the Fed's pledge to keep interest rates low until late 2014.

FBM KLCI Outlook: Lower liners and penny stocks to shine
This week, KLCI is expected to take cue from the outcome from major overseas development such as 30 January European Summit, Greece debt swap deal with bondholders and Italy’s medium to long term bond auction. Besides, focus will also be on U.S. January economic figures such as consumer confidence (31 January), ADP employment (1 February), ISM (1 February) and nonfarm payrolls (3 February).

Unless KLCI stages a breakout above the 1531 level (31 December 11 high), market is likely to consolidate further with attention remain on lower liners and penny stocks as more investors return from CNY holidays. Immediate support is 1500 while resistance are the huge gap between the 1529-1546 levels dated 5 August 11.

Daily KLCI: Awaiting An Ascending Triangle Breakout
FBM KLCI 30-01-2012

Daily KLCI: Building Its Base
FBM KLCI 30-01-2012a



Source: HLIB Research

Wednesday, January 18, 2012

Currency Investment: What is it and is it a good strategy for you?

Currency investments are definitely not for beginners. Only experienced investors are really able to see and track the patterns that go along with foreign currencies. They can find the little changes that make currency investments worthwhile, but keeping track of these changes can be very difficult.

What is Currency Investment?
Foreign currency investment requires the investor to monitor the exchange rates of various currencies. They buy and sell an investment in specific currencies to make money, much like buying and selling stocks or other investments. However, currency investment is much different than other types of investments because you don’t own a part of a company or a debt of a company. The investment is either kept on hand or treated as a digital asset when it is purchased.

Types of Currency Investment
There are many different types of currencies, and each type can be made into an investment. The best currencies now are the U.S. dollar, the British pound, the Japanese yen, and the euro. A majority of all trades made are with these currencies, so they are very popular with investors.

If you are looking into making a currency investment, you should keep track of the country or countries that use a particular currency. The amount of exports and imports, the national debt, and the gross domestic product in that country will all give some information about the value of the country’s currency.

Benefits of a Currency Investment
No investment is completely risk-free, and the same can be said for currency investments. The success of a person who decides to invest in currency completely depends on how they manage their investments. Most investors don’t like to put all of their investments in one place, so they spread their money around in the stock market, real estate, or other investments. When they decide to invest in foreign currency as well, they can reduce the risk of loss across their entire investment portfolio, and they could have the possibility of making a profit no matter what the economic climate may be.

Is it Right for You?
While foreign currency investments may not be for every person looking to invest, but if you aren’t afraid to do the work and you want an investment that gives back with little risk, you may want to consider currency investing. The act of investing in currency involves a lot of strategy and knowledge if you want to be successful. You definitely don’t want to just blindly invest in something when you are not fully educated on the investment, and even the most experienced investor might get confused with the work that goes into currency investing. Do your research, back up your decisions,and you may be successful, proving that currency investments were right for you.

Vanessa Lang is an author who writes guest posts on the topics of business, marketing, credit cards, and personal finance. Additionally, she works for a website that focuses on educating readers about payday loans.

Global Market Weekly Review, 9 - 13 January 2012

Banks will be allowed go below minimum liquidity levels set by global regulators during financial crises to avoid cash-flow difficulties. “During a period of stress, banks would be expected to use their pool of liquid assets, thereby temporarily falling below the minimum requirement,” the Basel Committee on Banking Supervision’s governing board said in a statement on its website yesterday, following a meeting in the Swiss city. The aim of the measure, known as a liquidity coverage ratio, is to ensure that lenders hold enough easy-to-sell assets to survive a 30-day credit squeeze.

Consumer borrowing (CICRTOT) in the U.S. surged in November by the most in 10 years, showing households are optimistic enough to take on debt and banks are willing to lend. The advance was almost twice as big as the highest forecast of 31 economists surveyed by Bloomberg News.

The European Central Bank held interest rates steady after two straight cuts as signs of respite from the sovereign debt crisis gave it scope to pause. ECB policy makers kept the benchmark interest rate at a record low of 1%, as predicted by 47 of 53 economists in a survey.

Indonesia kept interest rates unchanged for a second month, extending a pause in monetary easing as a weakening Rupiah and a government plan to contain fuel subsidies threaten to spur inflation. Bank Indonesia kept the reference rate at 6%. The decision was predicted by 13 of 18 economists in a survey, with the rest expecting a quarter-percentage-point cut.



Source: ING Funds Berhad

Malaysia Fixed Income Market Review, 9 - 13 January 2012

Fixed Income
Malaysian Government Securities (MGS) momentum strengthened further during the week under review, led by 7- and 10-year benchmarks. Sentiment was aided by upbeat demand at the first government bond auction this year, namely the RM3.5 billion 7-year MGS which garnered a strong bid-to-cover ratio of 3.6x (last offering in September11 was at 1.7x) at an average yield of 3.415%. Buyers pushed the 7-year and 10-year MGS yields lower by 11 basis points (bps) and 9bps week-on-week (WoW) to close at 3.38% and 3.60% accordingly. In contrast, the 3-year benchmark yield stayed unchanged at 3.01%, while the 5-year benchmark yield increased by 2bps WoW to settle at 3.22%.

On local economic front, exports moderated more than expected to +8.0% year-on year (YoY) in November11 from a revised +15.4% increase in October 2011, as sales of Electrical & Electronic (E&E) goods to the US and Thailand fell. On the other hand, the November 2011 imports climbed less than expected, by +8.4% YoY, beating the prior month’s revised +4.0%. Meanwhile, the November 2011 industrial production unexpectedly eased to +1.8% YoY, after climbing a revised 2.9% in October 2011, as mining contracted and manufacturing growth eased. In contrast, the month-on-month (MoM) industrial production retreated by -4.6% in November 2011 compared to the previous month’s +2.9%.

For Private Debt Securities (PDS) market, higher trading volume was recorded during the week mainly due to a sizeable toll-related primary issuance amounting to RM23.35 billion (AAA-rated) and RM11.0 billion (Government-Guaranteed) respectively making its debut last week. In the AA-segment, buying interest continued to be seen in financial institution bonds and followed by power bonds.

Fixed Income Outlook
Amid the continual debt crisis and sovereign rating downgrades in the Eurozone, local market will be focusing on the upcoming Monetary Policy Committee meeting on 31January 2012. Our take is that the Central bank will likely to keep rate unchanged while continue to assess development of the external factors including the growth prospect of the developed economies.

Meanwhile, we expect next week will be relatively quiet due to Chinese New Year break and the next government bond auction will be in February. Given the absence of Private Placement, the 1st 7-year MGS had garnered strong response from the market. We may continue to see stronger bid-to-cover ratio for the auctions this year compared to 2011.

Movement in Ringgit and a greater Asian growth theme will continue to influence the direction of foreign participation in the local government bond market.

On credit market, investors will continue to look for yield with a cautious mode given the softening growth prospect.

Fixed Income Strategy
We remain positive on local bond market given the perceived conducive environment for bond market. We continue to focus on value enhancing corporate bonds, trade on momentum when opportunities arise. Last but not least, we will continue to participate in new issuances for diversification and return enhancement.



Source for MGS levels: Bond Pricing Agency
Source: ING Funds Berhad

Markets Rebound, 9-13 January 2012

Equity
Equities rallied back nicely last week, help by improving economy outlook. MSCI World Index rebounded to 9 week high, climbing as much as 3 percent. Analysts speculate that the rise could be attributed to the European Union’s ability to manage some of its members’ debt, causing investors to buy more risky asset, on belief that equities will provide reasonable risk adjusted return. For the week, the FBM KLCI rose 9 points or 0.6% to close at 1,523 points. The FBM KLCI underperformed the region as up to Thursday the index was up 0.7% against the 1.2% rise by the MSCI FExJ. Average daily trading value for the week rose 32% to RM1.9 billion (RM1.47 billion previously), which was 31% higher the three-month average of RM1.48 billion.

Equity Market Outlook
We expect the market to consolidate further. The gap resistance (1,530 – 1,545) proved to be a tough nut to crack. But we remain hopeful as long as the index holds above the 200 day smooth moving average (SMA). We expect the market continue its consolidation for another week or 2 before it breaks the 1,540 points.

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



Source: Source: ING Funds Berhad

Monday, January 16, 2012

Dow Jones Falls 49 Points On Imminent S&P Eurozones Downgrade

Despite a strong January 12 consumer sentiment report, the Dow Jones tumbled as much as 159 points before mitigating its losses to 49 points amid weak J.P. Morgan results, possible Greek default and expectations of an imminent S&P eurozones ratings downgrade.

After the market closing, S&P said it had lowered the long-term ratings of Italy, Portugal, and Spain by two notches, and the long-term ratings of Austria and France by one notch, as initiatives taken by European policymakers in recent weeks may fall short of fully addressing systemic stresses in the eurozone.

The Dow will continue to consolidate its gains (YTD: +1.7%) following the S&P’s eurozones ratings downgrade coupled with the ongoing 4Q11 reporting season. Major results scheduled are Citigroup/Wells Fargo (17 Jan); Goldman Sachs (18 Jan);
Intel/Bank of America/American Express/Google/Microsoft (18 Jan) and General Electric on 19 January.

Daily DJIA: Crucial Uptrend Line Support To Prevent Further Selldown
DowJones16-01-2012



Source: StockCharts.com
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