• The local market declined to 1,708.09 down 0.3% versus the prior week, falling in sync with a global market rout.

• Foreign funds were back in net outflow position of RM182.9m versus an inflow of RM322.7m the previous week.

• Providing support were local institutions and retail net buying of RM154.1m and RM28.8m respectively.

• Following the completion of the US mid-term elections, concerns are currently on global growth, crude oil slump, and higher US rates.

Week 45 – respite was short-lived

Key highlight for the week is a net outflow of foreign funds worth RM182.9m after a healthy net inflow in week 44 at RM322.7m. Following on the Budget 2019 proposals, the Malaysian market was impacted by the introduction on additional gaming fee, higher casino duties and airport REIT – causing heavy sell-offs in Genting and MAHB.

Economic data from China showed producer inflation fell for the fourth straight month in October on cooling domestic demand and manufacturing activity, perhaps impacted from the on-going tariffs imposed by the US. The China data sent global stocks into a significant decline late in the week. The USD rose after the Federal Reserve kept its benchmark interest rate steady at 2.25% and signaled its fourth rate increase of the year could come in December. Perhaps of more significant to Malaysia is the continued slump in Brent crude oil price, which closed just slightly above USD70 a barrel Friday.

Week 46 – global growth concerns set to continue

Investors have plenty of reasons to sell the markets this week as worries continue about trade war and how the slowdown in China will impact Asian economies. In addition, the Federal Reserves’ policy statement remains hawkish, and has signalled more rate hikes ahead in 2019. For Malaysia, the focus will be on Brent oil as prices declined as the US sanctions on Iran turned out less aggressive than investors expected, i.e. giving 180-day waivers to 8 Iranian oil buyers. OPEC and its allies will meet in Vienna on Dec 6-7 to decide on output policy for 2019.

Source: BIMB Securities Research - 12 Nov 2018