Overall Market Outlook

08/04/2009 ( Wednesday )
Malaysian market closed lower at 919. Market is neutral towards the 3 by-elections results, as the seats are back to the incumbent parties, and the status quo maintained. Focus will be on the new cabinet line-up.While it is expected to be leaner, the new team is expected to deliver.
In the meantime, the global markets may succumb to mild profit taking.Following the conclusion of G20 meeting, trading may be subdued this week. Beside a shortened trading week as Wall St will be closed for Good Friday, traders may want to assess US wholesale inventories on Wednesday, retail sales on Thursday, and corporate earnings outlook as the reporting season roll-out, for signs of sustainability of the current sharp run up.
Wall St closed 2.3% lower, as the earnings reporting season started off with Alcoa, reporting 2nd consecutive quarterly loss. Dow of 7789, is on a limited downside to 7400 support. Upside at 8400 remains.Malaysian market is approaching overbought on the Stochastic indicator,suggesting a mild profit taking. RSI is steady at 69. Downside is limited to the price gap at 908. Caution is on the market closing at below the 908 price gap. So a dip below a key support level at 904, is likely to pull the index lower to the next price gap at 888.
All in all, the Malaysian market is now a lot more positive. There is some sort of expectation on the new Najib administration to introduce measures to boost confidence. The new administration started off well with the freeing of 13 ISA detainees, and this set the motion for delicate blending in an often confounding multi racial society. Generally, the public expect new changes on the cabinet lineup, delivery system, and a more focus administration to handle the most pressing economic issues
that continue to bleed the nation.
On this note, the KLCI, not only has the potential of testing the previous high of 936 on 7/1/09, it could even hit the upper boundary of the rising Diagonal Triangle at 953, which has being in force since October 2008.
Today’s range is between 912 and 924.

U.S: Stocks, oil retreat as dollar, treasuries gain; Archer Daniels slides
U.S. stocks slid for a second day after investors from George Soros to Marc Faber predicted the rebound in equities will falter as the market braces for a seventh straight quarter of declining earnings. The dollar rose against most currencies, oil fell and Treasuries gained. General Motors Corp. plunged 12 percent and Caterpillar Inc. dropped 5.9 percent. Applied Materials Inc. retreated 8.7 percent after a contract for solar equipment was slashed by $1.65 billion. Archer Daniels Midland Co. sank 11 percent after Citigroup advised selling the shares, while Exxon Mobil Corp. and ConocoPhillips lost at least 1.9 percent as Barclays Plc cut its earnings estimates for the energy industry. The Standard & Poor's 500 Index decreased 2.4 percent to 815.55. The Dow
Jones Industrial Average tumbled 186.29 points, or 2.3 percent, to 7,789.56. (Bloomberg)

Japan: Current account surplus shrinks 56% as demand for exports tumbles
Japan's current-account surplus narrowed in February as the global recession eroded demand for the nation's exports. The surplus shrank 55.6 percent to 1.117 trillion yen ($11 billion) from a year earlier, the Ministry of Finance said in Tokyo today. The median estimate of 24 economists surveyed by Bloomberg News was for a gap of 1.07 trillion yen. Japan had a 172.8 billion yen deficit in January, its first in 13 years.(Bloomberg)

Japan: Stocks fall on earnings concerns, oil; Kobe steel, Nomura decline
Japanese stocks fell on renewed concern the global recession will weigh on earnings and accelerate writedowns on company assets. Nomura Holdings Inc., Japan's biggest brokerage, lost 2.8 percent after rival Daiwa Securities Group Inc. said it will report an annual loss. Shin-Etsu Chemical Co., the world's largest maker of silicon wafers, was poised to drop after saying full-year profit trailed its forecast. (Bloomberg)

U.S: TALF loan requests drop 64% to $1.7 Billion in second round of Fed program
The Federal Reserve's requests from borrowers for loans to buy assetbacked securities fell 64 percent from last month as investors balked at visa limits and possible political efforts to tax earnings. Investors sought $1.71 billion from the Term Asset-Backed Securities Loan Facility to purchase securities backed by auto and credit-card loans, the New York Fed bank said today on its Web site. The Fed provided $4.7 billion in loans last month to purchase securities in the TALF's first monthly round. The decline hinders Fed Chairman Ben S. Bernanke's efforts to lower borrowing costs and extends a slow start for a program that the
Obama administration is using as a cornerstone of plans to revive credit and end the recession. (Bloomberg)

U.S: Oil drops a fourth day on forecast U.S. supplies rose last week
Crude oil fell for a fourth day on speculation that a government report today will show U.S. supplies increased as the recession curbed fuel demand. Stockpiles rose 1.5 million barrels last week, according to the median of 12 estimates by analysts in a Bloomberg News survey before the Energy Department report. Futures also dropped as falling U.S. equities signaled that fuel demand in the world’s biggest energyconsuming country will decline. Crude oil for May delivery fell 83 cents,or 1.7 percent, to $48.32 a barrel at 8:18 a.m. Sydney time on the New York Mercantile Exchange. Oil has risen 8.3 percent this year and is down 67 percent from a record in July. Yesterday, crude dropped $1.90, or 3.7 percent, to $49.15 a barrel, the lowest settlement since April 1.
(Bloomberg)

U.K: British economy shrinks 1.5% as recession resembles 1979,institute says
The U.K. economy shrank 1.5 percent in the first quarter as the recession increasingly resembled the one that started in 1979 when
Margaret Thatcher took power, the National Institute of Economic and Social Research said. The drop in gross domestic product followed a 1.6 percent decline in the last three months of 2008, Niesr, whose clients include the U.K. Treasury, said in London today. Consumer confidence last month matched the lowest level in at least four years, Nationwide Building Society said in a separate report. (Bloomberg)

( Source obtained from SJ Securities Sdn Bhd )

9 April 2009 ( Thursday )

Regional markets have started easing. It comes after the recent sharp run up in the global markets, in early March, when central banks mounted a massive monetary expansion through stimulus packages, as well as, taking proactive step in buying credit mortgage securities. It ended in a big bang on the USD1 trillion cash infusion into IMF during the G20 meeting.Now, the G20 summit is over. And this week, being a shortened trading week due to Good Friday, it looks timely for global markets to take a breather, and revert to caution ahead of the US wholesale inventories on Wednesday, retail sales on Thursday, and the roll-out of the earnings reporting season.Crude oil stabilised at USD49, on the smaller inventory gain. Support remains at USD45, until signs of demand picking up, and drawing from the growing stockpiles. However, there is a possibility of oil firming to USD56, riding on expectation of the worst is over. Dollar is easier at 99.9 yen, as global markets started the retreat. It could dip lower to 98.2 yen on the chart. Wall St closed 0.6% higher, on news of corporate merger in the housing sector. Meanwhile GM is rushing to meet the 1 June deadline. As the US government is putting pressure for more savings beyond the proposed slashing of debts by 46%, and cutting 47,000 jobs, GM may as well go for a bankruptcy filling. It has suffered USD82bn losses since 2004. Dow of 7837, is on a limited downside to 7400 support. Upside remains at 8400.
Eurozone is being hit with bad news. Their 4Q’2008 growth shrank 1.6%, more than previously thought, bringing the 2008 growth to
negative 1.5%. And more bad news for the British, just like their crummy, cold weather, on the February manufacturing output, down
0.9%, the 12th straight month of decline, and the largest stretch of losses since early 1980. Euro closed lower at 1.325. Chartwise, euro is on lower support at 1.257.
Malaysian market closed lower at 907. While the expected mild profit taking has started, it may find support at the price gap of 907 ahead of today’s 3 pm announcement of a new cabinet lineup. Technically, the Stochastic indicator has turned downwards. RSI is down to 61. Caution is on the market closing at below a key support level at 902, which will likely pull the index lower to the next price gap at 888. Today’s range is between 905 and 916. All in all, the Malaysian market is now a lot more positive. There is some sort of expectation on the new Najib administration to introduce measures to boost confidence. The new administration started off well with the freeing of 13 ISA detainees, and this set the motion for delicate blending in an often confounding multi racial society. Focus will be on the new cabinet line-up.

U.S: Buffett's Berkshire Hathaway loses Moody's top debt rating amid recession

Billionaire Warren Buffett's Berkshire Hathaway Inc. had its top-level Aaa credit rating cut by Moody's Investors Service on the falling value of stock markets and the impact of the recession on profit. The rating was cut two levels to Aa2 on ``the severe decline in equity markets over the past year as well as the protracted economic recession,'' Bruce Ballentine, a Moody's analyst, said in a statement today. The downgrade trumps a one-level cut by rival firm Fitch Ratings last month, and follows an announcement by Standard & Poor's that it was reviewing Berkshire's credit. Last year was the Omaha, Nebraska-based company's worst since Buffett took over in 1965, as the company had losses on derivative bets tied to stock markets and corporate bonds.
(Bloomberg)

Japan: Stocks rise on expectations for stimulus, rebound in machine orders
Japanese stocks rose after a ruling party official said the government may spend more to boost the economy, and machinery orders
unexpectedly rose in February. Kajima Corp., which builds commercial buildings, gained 1.6 percent. Mitsubishi Heavy Industries Ltd. added 2.2 percent. Toyota Motor Corp., which owns more than a fifth of autoparts maker Denso Corp., gained 2.1 percent after U.S. automakers said the Treasury will guarantee payments to suppliers. ``As signs of an economic recovery come into view, additional support measures will boost investor confidence,'' Mitsushige Akino, who oversees the equivalent of $615 million at Tokyo-based Ichiyoshi Investment Management Co., said in an interview with Bloomberg Television.
(Bloomberg)

China: Credit Suisse selling Chinese bonds shows markets opening to foreign banks

President Barack Obama can look to China's corporate bond market for evidence Premier Wen Jiabao is opening up his currency to the world. Sales of non-financial bonds rose to a record 199 billion yuan ($29.1 billion) this year, making it the third most popular currency for company debt behind the U.S. dollar and euro. The market overtook offerings in Japanese yen for the first time after being ranked sixth in 2007, according to data compiled by Bloomberg. During last year's presidential campaign, Obama said in a letter to the National Council of Textile Organizations that Chinese ``manipulation'' of the yuan creates a reliance on exports that hurts the U.S. and global economies. While denying the charge, China in December promised to open capital markets and is also easing rules limiting foreign banks' role in bond sales and trading. (Bloomberg)

New Zealand: House prices fell 9.3% in March amid signs of deeper recession

New Zealand house prices fell 9.3 percent in March from a year earlier as a deepening recession and rising unemployment deterred buyers.The drop in average prices was the biggest since the series began in 2005, Quotable Value New Zealand Ltd., the Wellington- based government valuation agency, said in an e-mailed report. Prices have been declining since July. (Bloomberg)

U.S: Oil rises after government shows smaller supply gain than API

Crude oil rose for a second day, extending yesterday’s gains that followed a U.S. government report showing a smaller inventory gain
than industry figures. Supplies increased 1.65 million barrels to 361.1 million last week, the highest since July 1993, the Energy Department said. Stockpiles were forecast to climb by 1.5 million barrels, according to a Bloomberg News survey. The industry- funded American Petroleum Institute said April 7 stockpiles jumped 6.94 million barrels to the highest since 1990. Crude oil for May delivery rose 69 cents, or 1.4 percent, to $50.07 a barrel on the New York Mercantile Exchange at 8:36 a.m. in Sydney. Yesterday, oil climbed 23 cents, or 0.5 percent, to $49.38 after touching $47.37, the lowest since April 1, before the Energy
Department report was released at 10:30 a.m. in Washington. Prices are up 11 percent this year. (Bloomberg)

10/04/2009 ( Friday )

Regional markets rose ahead of Japan’s proposed USD154bn stimulus package today, amounting to 3% of GDP. Earlier, Japan announced a surprise 1.4% rise in machinery orders in February, up from January, the first time in 5 months. It is a piece of good news, indicating capital investment.

Elsewhere, the Eurozone continues to be bogged down in bad news. It registered a negative 1.5% growth in 2008. Germany is expected to announce its industrial output sliding for the 6th month, down estimate 3% in February. Euro closed lower at 1.311. Chartwise, euro is on lower support at 1.257.

Crude oil continues to stabilise, gaining to USD52, on signs of bottoming. Targeting USD56, on expectation of the worst is over.

Dollar is back in the positive territory, closing higher at 100.6 yen, simply because of the upkick in the equity markets. Upside remains at 102.0 yen.

Wall St closed 3.1% higher, warming toward the guidance from Wells Fargo, on their record 1Q earnings, ahead of 22/4/09’s release. Dow of

8083, is targeting 8400. Malaysian market was focusing on the new cabinet line-up. It ignored the worse than expected February IPI, down 14.7% yoy, as against

estimate of 13.5% decline. It is the largest slump in 7 years. IPI is not expected to improve, until a recovery of global demand for

manufactured goods. As expected, the Cabinet line-up is leaner with 28 ministers, down from 32. With shuffling on a quarter of the cabinet, it looks like a good fit,

with capable hands in key ministries. While Nor has been moved from second finance minister, the finance ministry remains in good hand. Nor

is now the head of the economic planning unit. The second finance minister went to an economist Ahmad Husni. Mustapa Mohamed is now the trade minister, a role that best fit him. His overseas exposure, and excellent command of English, should place him in good stead. KLCI closed higher at 917. As expected, it has found support at the price

gap of 907. Upside is at 933, then 944. Resistance is at the upper boundary of the Diagonal Triangle at 953. Support remains at 907. RSI is at 65. Today’s range is between 914 and 930.


U.S: Stocks gain worldwide, led by record U.S. bank rally; treasuries decline



Global stocks rallied, led by a record gain in U.S. bank shares, as better-than-estimated earnings at Wells Fargo & Co. and speculation

American lenders will pass government stress tests boosted confidence in the financial system. Oil gained and Treasuries fell. Wells Fargo, the second-largest U.S. lender, jumped 32%. Bank of America Corp. climbed 35 % and JPMorgan Chase & Co. added 19% on a New York Times report that all 19 banks examined by the government will pass a review to determine their viability should the recession deepen. (Bloomberg)



U.S: Dollar rises, heads for weekly gain, on speculation U.S. economy improving



The dollar rose against the euro, heading for the biggest weekly gain in three months, on speculation investors are shifting funds to U.S.

securities on signs the world's biggest economy is improving. The dollar gained versus 15 of the 16 most-traded currencies after a government report showed the U.S. trade deficit narrowed in February to the lowest level in nine years. U.S. bank shares surged yesterday after Wells Fargo & Co., the second-biggest U.S. home lender, reported a record firstquarter profit that beat the most optimistic Wall Street estimates.(Bloomberg)



Japan: Bank of Japan members said market to stay stressed after fiscal year end



Many Bank of Japan board members said financial markets will remain``under stress'' beyond the fiscal year end and the central bank should

continue to provide extra funds to the banking system, minutes show. Minutes of the March 17-18 meeting were released today in Tokyo.

Japan's fiscal year ended on March 31. The central bank cut the key interest rate to 0.1 % in December and has since been buying corporate

debt and stocks from lenders to prevent a credit crunch from worsening the recession. (Bloomberg)



Japan: Stocks rise on U.S. jobless claims, Wells Fargo profit; Honda gains



Japanese stocks rose after fewer Americans sought unemployment insurance and U.S.-based Wells Fargo & Co. reported a record quarterly

profit, lifting optimism a recession in the world's biggest economy is abating. Nintendo Co., the world's biggest maker of handheld game

players, advanced 1.3% in Osaka trading as White House chief economic adviser Lawrence Summers said the ``free-fall'' in the U.S.

economy will end soon. (Bloomberg)



U.S: Oil rises more than $2 as equity gains signal demand may climb



Crude oil rose more than $2 a barrel as equities gained, signaling that some investors expect economies to stabilize, bolstering energy

demand. Oil climbed 5.8% after stocks advanced on better- thanestimated earnings at Wells Fargo & Co. and speculation banks will pass

government stress tests. Prices were also higher after a government report showed a smaller increase in U.S. supplies than the industry

indicated a day earlier. The Standard & Poor’s 500 Index added 3.3% to 852.68. The Dow Jones Industrial Average rose 2.9% to 8,067.85.

13/04/2009 ( Monday )

Malaysian market of 941, is on its 4th week of rising up trend, since the 836 low on 12 March. It is close to reaching the immediate target at 944. And with the market fast approaching the upper boundary of the Diagonal Triangle at 953, and a possible devaluation of Singapore dollar, we strongly feel that traders should be focusing on the critical support level, for sign of cracks, indicating profit taking. A dip below the key support at 925, is most likely to signal retreat to 894. RSI of 71, and the

Stochastic indicator are approaching overbought. Today’s range is between 930 and 946.

Monetary Authority of Singapore (MAS) is meeting on Tuesday for the semi-annual monetary policy. Market talks of a 4% devaluation of the Singapore dollar. Singapore is highly export dependent, where the exports account for nearly 200% of the GDP. It is also highly import dependent where most goods are imported. The problem lies in the collapse of exports, as the current global crisis has scaled back demand considerably, so much so that its exports declined 24% in Feb, for a 10th

month. There is also no sign of the economy picking up. With a sharp 16.9% contraction in the 4Q’2008, the government is revising the growth estimate for 2009, downwards to negative 5%. There is also concern of deflation, as its inflation rate is at a low 1.9%. On this scenario of collapsing exports, and low inflation, perhaps, the Singapore dollar is overvalued at 1.518 to the dollar, in the context of a shrinking economy, hit by the collapsing external demand. So, unlike other countries where the monetary policy focuses on interest rate, the heavily export-dependent Singapore’s monetary policy focuses on the

management of the exchange rate. By devaluing the Singapore dollar, it will help the exports sector, and hopefully, arresting the shrinking growth. Chartwise, the Singapore dollar is targeting 1.54, while consensus estimate is for 1.582 by the end of 2Q’2009. Ringgit, and the KLCI would be affected in the event of a devaluation of the Singapore dollar. On the ringgit of 3.61, the support is at 3.66. KLCI may attract profit taking, on sell on rally.


China: To ensure liquidity after loans surged to record, Central Bank says



China's central bank said it will ensure sufficient liquidity to sustain economic growth, damping speculation regulators may seek to restrain

credit after new loans jumped sixfold to a record in March. The People's Bank of China ``will implement moderately loose monetary policy and maintain the continuity and stability of policy,'' the central bank said on its Web site yesterday. It pledged ``ample liquidity'' to ``ensure

money supply and loan growth meet economic development needs.'' The statement indicated that reviving growth remains China's priority

amid concern that the credit boom will lead to bad debts and asset bubbles. (Bloomberg)



U.S: Russell 2000 flashes warning signals to S&P 500 rising fastest since 1933

The Russell 2000 Index's record one-month gain is sending danger signals to investors who remember how similar rallies in U.S. stocks

came to an end. The gauge of companies with a median value of $301mn is beating the Standard & Poor's 500 Index, where stocks have

an average market value of $6.5 bn, by 9.8%age points. Gains in the Russell 2000 are being led by an 11-fold jump in Spansion Inc., a

bankrupt chipmaker, and a sevenfold rise for Hayes Lemmerz International Inc., a wheel manufacturer that hasn't had a profit since

2006. (Bloomberg)



Japan: Wholesale prices fall at fastest pace since 2002 as slump deepens



Japan's wholesale prices fell at the fastest pace in almost seven years as the global slump deepened. Producer prices, the costs companies pay for energy and raw materials, sank 2.2 % in March from a year earlier, the biggest slide since May 2002, the Bank of Japan said in Tokyo

today. That compares with a median estimate of 27 economists surveyed by Bloomberg News for a 1.8% decline. The Bank of Japan's

quarterly Tankan survey this month showed manufacturers expect the costs they pay for goods and materials to fall to the lowest level in

seven years. (Bloomberg)



U.S: Goldman Sachs share sale to repay U.S. Aid may force rivals to follow suit



Goldman Sachs Group Inc., by selling stock to help it repay $10bn to the U.S. Treasury, may pressure competitors to follow suit or appear

dependent on government support, analysts said. The company, scheduled to report earnings April 14, is considering announcing the

share sale as early as next week, the Wall Street Journal reported yesterday, citing unidentified people familiar with the matter. Lucas van

Praag, a spokesman for New York-based Goldman Sachs, declined to comment. (Bloomberg)



Indonesia: Stocks, Rupiah may advance on President's party lead in polls



Indonesian elections that will strengthen President Susilo Bambang Yudhoyono's hold on parliament may also spark gains in stocks and the

rupiah, the nation's biggest investment fund manager said. PT Telekomunikasi Indonesia and PT Indosat, the nation's two biggest

phone companies, as well as toll-road operators and power stations may benefit from the government's push for more investments following the Democrat Party's early lead, PT Schroder Investment Management Indonesia's Kiekie Boenawan said. Yudhoyono presided over reforms

that led the economy to expand more than 6% in the past two years, the fastest since the 1997 Asian financial crisis, and the polls last week

may boost his chances of re-election in July. (Bloomberg)



U.S: Wall Street in Wells Fargo moment as Obama stress tests earnings euphoria



No amount of enthusiasm for Wall Street earnings reported this month and there was plenty on April 9 to send Wells Fargo & Co. shares up

32% after the bank announced a record first quarter -- can overcome what President Obama may soon have to say. That's because the

results that matter, the ones that will determine whether San Franciscobased Wells Fargo and 18 other U.S. banks need more government

cash, won't be revealed until the end of April, when the Obama administration's stress tests are completed. Treasury Secretary Timothy

Geithner has said he expects some lenders will require ``large'' amounts of capital, and that could take the bloom off any rosy firstquarter

report. (Bloomberg)



U.S: Crude oil falls on demand concerns after IEA lowers forecast

Crude oil fell in New York after the International Energy Agency cut their 2009 demand forecast to the lowest since 2004 because of the global recession. Oil consumption will fall by 2.4mn barrels a day this year, about the same amount that Iraq produces, to 83.4mn barrels a day, the IEA said on April 10. Trading in New York and London was closed that day for the Good Friday holiday. U.S. crude supplies are at their highest since July 1993, the Energy Department said on April 8. Crude oil fell as much as 62 cents, or 1.2%, to $51.62 a barrel in electronic trading on the New York Mercantile Exchange. It was at $52.00 a barrel at 6:55 a.m. Singapore time. (Bloomberg)



Malaysia: Office rentals in KL to fall by this year

Office rental rates in Kuala Lumpur are expected to drop by 10% to 15% from their peak of about RM8 per sq ft this year amid the economic

slowdown. Although office occupancy rates are still holding up quite well, rental rates are expected to fall from their earlier highs due partly to

new office space coming onstream. DTZ Nawawi Tie Leung executive director Brian Koh said that at least a dozen new office buildings, with a total net lettable area of 4.13mn sq ft, would be completed in KL and other parts of the Klang Valley this year. Of these, four – Menara

Worldwide, G Tower, Fraser KL and The Icon – are located in KL’s golden triangle, while the rest are in central commercial areas and other

decentralised areas such as KL Sentral, Bangsar and Petaling Jaya. (The Star)

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