The Alpha Trader
COULD A MAJOR BULL MARKET LIKE 1993 BE UNFOLDING?
TheAlphaTrader
Publish date: Sun, 18 Feb 2024, 01:00 PM
TheAlphaTrader
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With over 20 years of trading experience in financial markets, this blog is intended to share with fellow traders how I identify good trade setups from a combination of fundamental, technical and situational considerations
As a trader and keen observer of markets for over 25 years, I have seen my fair share of market bull and bear cycles. Unfortunately, I was still a student during the 1993 bull market and did not participate in the most bullish market cycle ever in the history of our KLSE! I remember hearing stories from relatives and friends on how crazy markets were and punters were either swamping into public galleries (the days before the internet) or glued to their teletext screens. You could easily make 20% to 30% dealing in contra trades, which were T+7 those days. Sadly, we have never seen another bull market in such epic propotions of 1993 ever since.
The year 2024 has started with a bang, Bursa Malaysia started off as one of the best performing markets in the world for the first week of January. However, the upward momentum was abruptly disrupted by the mini crash in certain penny stocks triggered by margin call and warehousing liquidation. It was actually a good opportunity to buy good quality stocks across the board as the market has regained its footing after the short scare with many quality stocks trading at new 52 week highs. The FBM KLCI index is already up 5% year-to-date trading at a 52 week closing highs.
So, could we be at the beginning of another epic bull market the likes of 1993?
SIMILARITIES BETWEEN 1993 AND 2024
1. Interest rates cycle peak
Interest rates have peaked this time round, as indicated by the dovish stance and guidance provided by the Federal Reserve. We could be seeing as at least two interest rate cuts this year indicated by the Fed Funds Rate. This is similar to the rate cycle in the early 1990s where interest rates peaked 1992 just before the start of the most bullish stock cycle ever in Malaysia.
2. Equity markets are top heavy in the USA
The S&P index has just hit a major milestone by crossing the 5000 mark, the highest level in history this year. This was similar to the behaviour of US markets in 1992/1993. Money started moving into undervalued emerging markets in search of higher returns especially in the second half of 1993 with a lot of ‘“hot money” finding its way into South East Asian equity markets. At one point, The KLSE even made history with our daily turnover exceeded that of the NYSE!
3. Index linked stocks are on the move
The best indicator for foreign fund activity is usually in the benchmark indices since the first stocks that are on their buy lists will always be the familiar big cap names. Malaysia’s KLCI index is having one of the best starts in recent years with the index already up 5% year-to-date. This is followed with rotation into other thematic and qualty second and third liners which we are witnessing on a daily basis. The market breadth has been positive on most days reversing the trend from last year. What we need to see is more retail participation to drive up the trading volumes.
CONCLUSION
I believe that Bursa Malaysia is in the early stage of a very powerful bull market, driven by the return of foreign funds as well as interest from the local retail market. Having been in the doldrums for so many years, a major bull market has been called by many experts for a long time but this may finally materialize in the Year of the Dragon as the stars seemed to be aligned. I will share more of my stock ideas in the posts to come.
Disclaimer: This blog is created for sharing of trading ideas only. It is not in any way or form meant to be an inducement or recommendation to buy or sell any stocks. Consult your financial consultant before making any financial investments.
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Discussions
2 people like this. Showing 37 of 37 comments
JTiasa has moved, Utd Plantation has touched RM 20. Even Innovest has moved up from 1.30.
TH Plantation has moved up also. Only Plantation shares with very good prospects, with little or no borrowings, but yet not recognised by market is TSH.
2 months ago
1993 bull run we got T+7 that why so strong, rm0 upfront
if we want back 1993 bull run we must change back to T+7
2 months ago
Malaysian market put too many restrictions and just does not appear on the radar of many big foreign investors who have plenty of choices. A Bull Run ??? Q4 2023 GDP is a great disappointment. A simple Bull market will be a blessing. Dream on!
2 months ago
Bursa Malaysia is in the early stage of a very powerful bull market !
Absolutely, it is true !!! Please no miss the boat$$$ ! 😁😂😄😅
2 months ago
The highest point of Jakarta Composite index (JKSE) was at 743 in 1993, the present JKSE is at 7,323 on 18/2/2024, an increase of 6,580 points or 886% in the last 30 years.
Indonesian investors are super rich.
The highest point of FBMKLCI was at 1,332 in 1994, the present FBMKLCI is closed at 1,534 on 16/2/2024, an increase of 202 points or 15.3% in the last 30 years.
Malaysian investors are very poor.
Very sad for Malaysian investors.
Thank you.
2 months ago
Very misleading loh!
U should not use the highest index price in 1993 mah!
U should use the closing index price 1993 as comparison loh!
Using highest index price as a base of comparison very misleading loh!
Posted by OTB > 20 minutes ago | Report Abuse
The highest point of Jakarta Composite index (JKSE) was at 743 in 1993, the present JKSE is at 7,323 on 18/2/2024, an increase of 6,580 points or 886% in the last 30 years.
Indonesian investors are super rich.
The highest point of FBMKLCI was at 1,332 in 1994, the present FBMKLCI is closed at 1,534 on 16/2/2024, an increase of 202 points or 15.3% in the last 30 years.
Malaysian investors are very poor.
Very sad for Malaysian investors.
Thank you.
------------------------
When the readers in this forum make some money, no point to spread fear and jealous we make money.
KLSE stock market is far ... far ... worse than other stock markets in the last 30 years.
Even the share price of YTLPower moves up north to 5.88, it is still nothing to compare against other best performing stock in other stock market.
KLSE is still a laggard stock market in SEA.
Thank you.
2 months ago
I believe another 15 years of AI as PM, Bursa will shoot up 800% from 2023 Bursa closing index.
Don’t worry, be happy 😃
2 months ago
Sorry typo…
I believe another 15 years of AI as PM, Bursa will shoot up 800% from ***2022 Bursa closing index.
Don’t worry, be happy 😃
2 months ago
in 1993 bull run, retailers no need come up with any cash for 7 days! and many ppl were putting rm0 upfront, many were buying and selling off the security houses money. this so called Free Money drove the Bull Run to dizzing levels
nowaday very different. most security houses give u small trading limit without upfront cash. We may have a bull run, but will 100% not be like 1993.
2 months ago
All worthless, fiat currencies (cash) are falling to ZIRO. So, all people prefer to keep hard assets instead of cash now !!!
2 months ago
Bcos of the fiat currencies, the more u need to buy shares, especially plantation stocks which have huge cheap plantation land loh!
2 months ago
hard assets = valued stocks, land, precious metals (gold) etc
all fiat currencies (including USD) = ziro value, printed from nothing with no asset backing.
2 months ago
Mani stock mkts throughout our world are hitting all time high now. People got lost faith in the fiat currencies which are losing their purchasing power and prefer to keep their wealth in stk mkts rather than in fiat currencies.
2 months ago
The highest point of Jakarta Composite index (JKSE) was at 743 in 1993, the present JKSE is at 7,323 on 18/2/2024, an increase of 6,580 points or 886% in the last 30 years.
Indonesian investors are super rich.
The highest point of FBMKLCI was at 1,332 in 1994, the present FBMKLCI is closed at 1,534 on 16/2/2024, an increase of 202 points or 15.3% in the last 30 years.
Malaysian investors are very poor.
Very sad for Malaysian investors.
KLSE stock market is far ... far ... worse than other stock markets in the last 30 years.
Even the FBMKLCI Index moves up north to 2,000 points, it is still nothing to compare against other best performing stock markets.
KLSE is still a laggard stock market in SEA.
Thank you.
2 months ago
The ringgit’s recent performance follows similar trends with other regional currencies, the central bank said, which it attributed to external factors like market adjustment to changing US interest rates and uncertainty around China’s economic prospects.
On a long term basis : all currencies including USD = 0 value as they are printed from NOTHING. gold = always on uptrend with no upper max. limit !!! 😍🥰🤩
2 months ago
For in the space of 3 months between January and March 2023, Singapore’s central bank has quietly bought an incredible 68.7 tonnes of gold, making Singapore the world’s leading sovereign gold buyer for the first quarter of 2023, even ahead of China.
Singapore's central bank ... ultra smart, buy and keep gold as reserve instead of the worthless , fiat currencies.
2 months ago
KLCI bottom is 1369 pts on 8/6/2023. Mani players oredi got misssed the boat$$$ ?
2 months ago
(Feb 26): Foreign buying of Malaysian equities more than doubled to RM786.1 million last week from RM352.9 million the prior week.
In its fund flow report on Monday, MIDF Research said that similar to the previous week, foreign investors net bought every day.
It said the net buying streak has gone on for 16 consecutive trading days, something not seen since February 2022.
2 months ago
The main stock market index in Malaysia (FKLCI) increased 101 points or 6.96% since the beginning of 2024, according to trading on a contract for difference (CFD) that tracks this benchmark index from Malaysia.
2 months ago
Numbers do not reflect the real strength of economy.
It is for the number crunches who wants to paint a picture of positivity or negativity with a "I told you so" pattern.
1 month ago
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