KL Trader Investment Research Articles
USDMYR FX rate going south?
Last Friday, it looked there was widespread panic, as the talk of USDMYR foreign exchange (FX) rate went as high as RM4.535 against the dollar. What confused the market further was when several local banks were told on Friday by the central bank to follow the Thursday’s offshore closing rate of RM4.29 in their transactions. Additionally, banks were told not to provide US dollar-ringgit quotes to offshore counterparts, something that further fueled additional confusion, and panic in the market. This led to very little US dollar-ringgit trades done last Friday.
The central bank, Bank Negara, stepped in with a statement saying that it would provide liquidity in the currency markets if necessary. “The Malaysian FX market remains open and Bank Negara stands ready to provide liquidity if necessary to ensure orderly market. Malaysia continues to welcome real investments and provide all avenues for FX transactions and hedging requirements onshore,” it said in a statement.
This is expected to provide some relief to market participants concerned with recent developments in the MYR market.
In an article on the Star, it was explained that FX dealers tend to observe the offshore rates in the early trading session for clues on how to price the US dollar against the ringgit, until the official exchange rate is published by 3.30pm daily. Offshore US dollar-ringgit rates, as indicated by the one-month ringgit non-deliverable forward (NDF), went as high as RM4.535 before settling down at RM4.4865 against the dollar on Friday.
Governor Datuk Muhammad Ibrahim had reiterated that there would be no pegging of the ringgit, and stressed that the currency’s pricing should not be influenced by speculative positioning in the NDF market.
Source: Macquarie Research - 14 Nov 2016
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Discussions
Be the first to like this. Showing 46 of 46 comments
Foreign Funds disposed its stakes in Bursa worth RM 690 million on last Friday. The amount exited is staggering and hardly be seen in a single day. They have been trying very hard to push down our index to create panic. How far they can go? Bullets (shares) are getting lesser after using up. Sad to say, their effort won't have much impact on this Boleh land.
2016-11-14 10:40
Mango. They whacked Bonds, Forex and Bursa all together at the same time. It seems a hidden force behind to twist the markets.
2016-11-14 11:00
Mango. Najib is good at crisis management. He can even sit on the 1MDB scandal until today. It has proven that he is quite resourceful.
2016-11-14 11:07
Chinese businessman loves to go for big so they will certainly provide " 一條龍 " services. Imagine what would happen to the service sector when more Chinese tourists gete to Malaysia for a tour... they would provide planes from China to KLIA...Buses for tour from KLIA to the tourist spots...Restaurants tailoring their Chinese bud...Get them to Souvenir shops opened by Chinese....
2016-11-14 12:09
Mango. It's hard to break the chains as journey under the control of China Chinese tour agent. They are the one decided where to stop for consuming F&B and souvenir. It seems big corporations are benefited mostly from increasing in tourist arrivals i.e. Airport , Air Asia and Genting.
2016-11-14 12:27
Posted by Up_down > Nov 14, 2016 10:40 AM | Report Abuse
Foreign Funds disposed its stakes in Bursa worth RM 690 million on last Friday. The amount exited is staggering and hardly be seen in a single day. They have been trying very hard to push down our index to create panic. How far they can go? Bullets (shares) are getting lesser after using up. Sad to say, their effort won't have much impact on this Boleh land.
Ans : FBMKLCI in December 2007 was around 1,445, the FBMKLCI (11/11/2016) was at 1,634. A gain of 189 points in 9 years. To me, last 9 years were a bear market, I see no reason to have a stock market crash in KLSE. The next support of FBMKLCI is at 1,612 and 1,600 respectively.
Up_down,
Do you agree or think that FBMKLCI will crash in 2016 or 2017 ?
Your opinion is appreciated.
Thank you.
Ooi
2016-11-14 12:34
Whack bonds likely...but how to whack bursa when they hardly own our shares....
2016-11-14 12:41
OTB. When we look at the retail participation in our Bursa for the past 2 years, it seems that they have exited the market mostly between 2014 and 2015. Retailers are not convinced to pour more money into the market.
I believe those retailers remained are hardcore in shares market. How funds and EPF take advantage over Retailers while Retailers are drying up. Now, the fight is between Local Funds cum EPF with FF. FF stakes in Bursa are getting lesser or worth about RM 7 billion...With such amount of bullets, how FF can trigger crash that what had happpened in year 2007 and 1997.
Retail participation:
year
2014 - Exited RM 1.3 billion
2015 - Exited RM 1.7 billion
2016 - Exited RM RM 60 million ( until now)
Posted by Up_down > Nov 14, 2016 10:40 AM | Report Abuse
Foreign Funds disposed its stakes in Bursa worth RM 690 million on last Friday. The amount exited is staggering and hardly be seen in a single day. They have been trying very hard to push down our index to create panic. How far they can go? Bullets (shares) are getting lesser after using up. Sad to say, their effort won't have much impact on this Boleh land.
Ans : FBMKLCI in December 2007 was around 1,445, the FBMKLCI (11/11/2016) was at 1,634. A gain of 189 points in 9 years. To me, last 9 years were a bear market, I see no reason to have a stock market crash in KLSE. The next support of FBMKLCI is at 1,612 and 1,600 respectively.
Up_down,
Do you agree or think that FBMKLCI will crash in 2016 or 2017 ?
Your opinion is appreciated.
Thank you.
Ooi
2016-11-14 13:09
Mango. We have come to a conclusion that Bursa was crashed between 2014 and 2015 which is back by the data. It's not simply like some shouting (talk cock) for crashing again without any support facts. They don't even know their emotion are manipulated by Mr. Market while reading negative news and looking at the share prices and volume.
Posted by Mango Juice > Nov 14, 2016 01:13 PM | Report Abuse
Past 2 years foreign funds already dumped around 27 billion! 2014, they dumped like 7 billion and 2015 was the worst, like 20 billion! So 2015 was the crash that we didn't realise! As for 2016, mostly see saw from foreign funds! Another few billion is peanut! As long as local funds willing to replenish!
2016-11-14 13:26
OTB. Can you can share with us statistic of trade participation between year 2007 until 2013 for Local funds and Retailers if you have. Thanks.
2016-11-14 13:32
problem is our government are not being realistic, they always say current myr are not reflecting its true value and fundamental. So how? wait lo, until one day the value reflect lo, maybe another 10 years la lol
2016-11-14 13:38
I will be convinced FF might trigger crash with bullets RM 7 billion provided Retailers participation still remain in big scale as what happened in year 1997 and 2007. Now, Without more ikan bilis.....good days have gone to Funds.
Posted by Mango Juice > Nov 14, 2016 01:33 PM | Report Abuse
Posted by Up_down > Nov 14, 2016 01:26 PM | Report Abuse
Mango. We have come to a conclusion that Bursa was crashed between 2014 and 2015 which is back by the data. It's not simply like some shouting (talk cock) for crashing again without any support facts. They don't even know their emotion are manipulated by Mr. Market while reading negative news and looking at the share prices and volume.
Answer : True! I mean we have all the fact at the tip of our fingers compare to those shouting crash with no facts! I can tell you how much foreign funds dump today! And I can tell you that for the past 3 weeks foreign funds dumped 2.1 billion! And like you, I know you know how much bullet foreign funds still have!
2016-11-14 13:43
Posted by Up_down > Nov 14, 2016 01:43 PM | Report Abuse
I will be convinced FF might trigger crash with bullets RM 7 billion provided Retailers participation still remain in big scale as what happened in year 1997 and 2007. Now, Without more ikan bilis.....good days have gone to Funds.
Ans : RM 7 billion is a small number, please note that some foreign funds are still stayed invested in KLSE. Those want to leave (may be US fund), will leave in next few months.
Thank you.
2016-11-14 13:50
The size of local funds is relatively huge in Boleh land. More people are willing to keep their savings in Funds management companies. Assets under management has grown from less than RM 250 billion in year 2008 until RM 668 billion by year 2015.
LARGE DOMESTIC FUND MANAGEMENT OFFERS MARKET STABILITY
http://capitalmarketsmalaysia.com/large-domestic-fund-management-offers-market-stability/
2016-11-14 14:26
So there will always be funds in the market waiting to buy n goreng despite an overall bearish market...for example we have export co play in 2015, then steel co in 2016
I think only TTB can have the luxury to keep 70-80% cash in FD waiting for The Big Crash
2016-11-14 14:30
From its lows of 2008 (abt 8++ points) till its peak in 2014 (abt 1896), there has not been any meaningful correction). At most it has only corrected abt 38% since 2014.
2016-11-14 14:31
KLCI wise looks not much correction, but oil n gas overall drops quite a lot..can consider as Big Crash...some banking stocks also retraced more than 30% from their peaks
2016-11-14 14:33
Correction did happen but not until 50% especially heavyweight Blue chips. Don't expect correction to take place at one go applying to all 30 KLCI counters. Local Funds and EPF won't allow it to happen....indirectly it means who (Officers of EPF and local funds ) dare to give big trouble to Najib in the next 3 years.
2016-11-14 14:40
TTB is the BIGGEST FOOL! he should at least invest in REACH, can get 2-3X FD rate with Zero risk.
2016-11-14 14:44
Some of the component plantation stocks that rose since 2008 did not correct themselves even when QE came to an end. The end of QE means, in the words of Citicorp, "the setting of commodities sun". CPO prices dropped but KLK etc did not correct much. Whereas those listed plantation companies in overseas stockmart all have dropped 50%. That is one of the reasons why the KLSE did not correct much.
2016-11-14 14:46
Maybe TTB can buy some SPSetia-PR and subscribe the PA with RM1 and can get 6.49% (unless SPSetia close shop) every year...then maybe he can give 1 cent div after netting off his RM6M+ fee
The return is 100% higher than his FD
2016-11-14 14:48
INI KALILAH! we are at the very early stage of another Asian financial crisis.
2016-11-14 14:48
Tan Teng Boo of Icapital was reported as saying that he did not buy any plantation counters in KLSE but bought plantation companies in the London Stockexchange.
2016-11-14 14:50
think logically, when was the last Malaysian real recession? It wasn't 2008 (US Subprime Crisis), it was 1997! A lot of ppl lost their jobs then. 20 years without Recession???? IMPOSSIBLE! It's like eating non-stop without needing to go toilet.
2016-11-14 14:51
Posted by bracoli > Nov 14, 2016 10:24 PM | Report Abuse
Hi otb wad d u think of johotin
Ans : TA is very good, break high.
Immediate target price is 1.25.
Thank you.
2016-11-14 22:33
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As long as mr kangkung still there & refuse to step down , things will just go from bad to worse..
2016-11-14 10:10