• The local market fell to 1,689.37, down a hefty 42.77 pts versus the prior week due to a combination of factors – domestic and external – including negative market sentiment across Asia’s stock markets.

• Overall, week 43 saw a net foreign selling of RM310.1m, while local retail was net buy of RM244.6m. In the previous week, the corresponding figures were at -RM128.7m and RM8.8m respectively.

• Expect market to remain weak, and volatile, due to lack of positive catalyst and ahead of details on fiscal policies in the upcoming Budget 2019.

Week 43 sees higher outflow

Key highlight for the week is the continuation of net foreign selling of RM310.1.m versus RM128.7 in week 42. Meanwhile, local institutions were quieter, buying a total of only RM65.5m last week compared to RM119.9m in the previous week.

The market was considerably weaker last week, as the KLCI fell to its lowest level since July, due to a myriad of factors. The biggest concern appears to be on global economic health for 2019. Selling was across the board with telcos and technology sectors particularly hard hit. Technology stocks took cue from a global tech stocks rout, with the Nasdaq testing the 7,000 level.

The ringgit continued to soften against the USD, closing at nearly 4.175 in tandem with a decline in oil price. Brent oil prices rose slightly Friday, but were down for the third week in a row as supply is projected to be able to meet global demand. Brent crude oil declined 2.2% on the week, down from its peak of nearly USD87 earlier this month.

Week 44 – global economic growth and Budget 2019

The Budget 2019 to be tabled on Friday may see a higher budget deficit as the government attempts to balance between possible slower revenue whilst retaining key development spending. Additionally, the threatening dampening impact from a possible global economic slowdown for 2019 and US-China will continue affecting market sentiment, in our view.

Source: BIMB Securities Research - 29 Oct 2018