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KUALA LUMPUR : Foreign buying of key stocks especially Tenaga Nasional powered the FBM KLCI to its fourth consecutive day of gains on Tuesday, with strong buying in the late part while the ringgit strengthened against the US dollar.

At 5pm, the KLCI was up 6.39 points or 0.37% to 1,724.75 – the highest in eight months. Turnover was 2.42 billion shares worth RM2.87bil. The broader market was negative with decliners outnumbering advancers with 473 losers, 396 gainers losers and 353 stocks unchanged. 

Data showed foreign funds were net buyers at RM410mil and retail investors net buyers at a mere RM820,000 while local institutions were net sellers at -RM410.8mil.

The ringgit rose to a seven month high of 4 against the dollar. The currency's gains were fueled by the continuing rally in Brent crude prices which were nearly US$42 per barrel on Tuesday before easing slightly.  

The ringgit was last traded at 4.01 after strengthening to a high of 3.98 against the greenback. 

Crude palm oil futures also continued to advanced to a new two-year high, boosting the economic prospects of commodity-dependent Malaysia. 
 
The gains in the index were mainly propelled by Tenaga shares which rallied 52 sen to  the highest point in almost a year to close at RM14.
  
Asian markets were mostly mixed apart from a strong rally in Japanese equities as markets reopen after closing on Monday. Meanwhile, European shares fell at the open following reports of multiple terrorist attack in Brussels, Belgium. 

Speculation that central banks globally will stick to an accommodative monetary policy for the rest of this year has spurred global equities over the past one month, with both Dow Jones and Standard & Poor's 500 indices erasing losses for this year. 

Brent crude fell 10 cents to US$41.44 per barrel while US crude declined by 9 cents to US$41.43 per barrel following a strong surge in prices overnight. Petronas Chemicals fell nine sen to close at RM6.7. Petronas Gas lost 16 sen to RM21.84 while SapuraKencana Petroleum fell 5 sen to RM2.10.
 
Crude palm oil futures for third month delivery rose RM27 to RM2,712 per tonne, extending its gain for a sixth consecutive day.  Among the plantation counters in the KLCI, Sime Darby closed up eight sen to RM8 while Kuala Lumpur Kepong rose 10 sen to RM24.28.
 
Among the banks, Maybank closed flat at RM8.95. RHB Capital fell nine sen to RM5.88 while Public Bank rose two sen to RM18.98.
 
As for telcos, Maxis fell 4 sen to RM6.30 while Digi fell one sen to close at RM4.95. Axiata closed flat at RM5.91. 

Scientex was the top gainer after posting a strong set of second quarter results and after proposing a bonus isse. It closed 64 sen up to RM12.94.

UMW added 42 sen to RM7.04 and IOI Properties 17 sen to RM2.42.
 
Among the key regional markets,
 
Hong Kong’s Hang Seng Index fell 0.08% to 20,666.75;
 
The Shanghai Composite Index fell 0.64% to 2,999.36;
 
CSI 300 fell 0.73% to 3,225.79;
 
Taiwan’s Taiex fell 0.31% to 8,785.68;
 
South Korea’s Kospi rose 0.35% to 1,996.81 and
 
Singapore’s Straits Times Index fell 0.04% to 2,880.65.
 
Spot gold rose US$10.01 to US$1,253.76 per troy ounce.

Calvin comments:

Foreign Funds Are Not Just In Malaysia. They are in every promising Emerging Markets. FED Janet Yellen has given assurance that increase of interest rates will be postponed or if there should be any increase at all it will be very moderate.

As such Funds are leaving the US for other better investment destinations like EM. The best will be Malaysia. All Emerging Markets weakened against US Dollar when Funds returned to the US the last 2 years. Now is The Reversal or the Great Unwinding. Going forward the US Dollar  might grow weaker and weaker due to continual selling of Greenback for Other currencies including the Thai Bath, Sing Dollar, Indonesia Rupiah, philippine peso & the Malaysian Ringgit!

As such All Export Stocks will continue to be hammered. The Strong US Dollar Catalyst is now over. 

As Ringgit Strengthens Those That Have High Foreign Debts Now Look Less Bleak. So they will be a readjustment upward. Now Domestic Theme Stocks will come into play. One of them will be Plantation Stocks Due to Very Hot El Nino.

Expect a rerating of Plantation stocks soon by funds & analysts going into year 2016, 2017 & 2018.

The 11MP Sarawak Election Theme Stocks like CMSB, KKB, WEIDA, HSL, SCABLE, NAIM & KBUNAI Now Look Aged.

Next Will Be GREATER KL, BANDAR MALAYSIA, KL - SPORE HSR & SPORE - JOHOR MRT Theme Stocks.

Going into Year 2018 Will Be Malaysia Election Theme Stocks. Still 2 Years Away. What or Which Are The Stocks That Will Come Into Play 2 Years Down The Road? 

There Will Be Catalyst After Catalyst. Opportunities & Newer Opportunities Will Arise in their turns.

So In Summary:

1) Palm Oil Theme Stocks Due To EL NINO & LA NINA

2) GREATER KL, BANDAR MALAYSIA, KL-SPORE HSR, SPORE -JB MRT THEME STOCKS

3) 2018 ELECTION YEAR THEME STOCKS.

Happy Investing

Regards,

Calvin,

Singapore

Note:

The Trend for Palm Oil Surge is Now Fully Confirmed.

Ringgit Rise is gradual & benign

Crude Oil Price Rise Still Uncertain. Trend still unclear.

Vedict:

BUY PALM OIL COUNTERS FOR CERTAINTY.

CHEERS!