via Malaysian Insider
Yesterday, we all read the news that the Conference of Rulers had decided in a pre-council meeting that the Rulers would like to see a quick resolution to the 1MDB problem. The Keeper of the Rulers' Seal, Datuk Seri Syed Danial Syed Ahmad later issued a statement to the media, from which I have picked out a few pertinent points:
- All concerned should extend "real and sincere" cooperation so that the investigation (into the 1MDB problem) will achieve its objectives
- Enforcement agencies and regulatory institutions such as the police, Malaysian Anti-Corruption Commission, Bank Negara Malaysia, Attorney-General's Chambers and the judiciary, as well as related government bodies should be worthy of God's trust and the people's faith with transparency, credibility and integrity
- The findings of the investigation must be reported comprehensively and in a transparent manner
- Appropriate stern action should be taken against all found to be implicated
In addition, I'm impressed by the call made to our "leaders" to uphold the constitution and to safeguard harmony & solidarity of the people. We have seen how the September 16 rally nearly led to an ugly incident in Petaling Street (or, better known as the China town of Kuala Lumpur). The relevant points raised by the Rulers are::
- All leaders shall adhere to the Rukun Negara principles of upholding the constitution and the rule of law
- Harmony and solidarity of the people should be safeguarded at all times and never be sacrificed for shallow political aims
Today, we saw the market gave a resounding vote of confidence that the message from the Rulers is the way forward to resolving the political stalemate caused by the 1MDB mess. The sharpest reaction came from the currencies market where the MYR rebounded strongly against the USD & SGD. From Chart 1 below, we can see that USD-MYR & SGD-MYR have both broken down below the lower line of their expanding triangle or upward channel. This means that both currency pairs have probably peaked and will likely to trend lower.
Chart 1: USD_MYR & SGD-MYR's daily chart as at Oct 7, 2015 (Source: XE.com)
In the stock market, share prices rallied strongly in the afternoon session. FBMKLCI rose 27 points to close at 1689. That means FBMKLCI is now pressing against the neckline of the head and shoulders top reversal. If it can break through this level, the market will transition out of a bear market to either a horizontal trend or an uptrend market.
Chart 2: FBMKLCI's monthly & daily charts as at Oct 7, 2015 (Source: ShareInvestor.com)
The FBM70 index - representing the 2nd liner stocks - rose 280 points to close at 12686. This means the FBM70 index has broken above the strong horizontal line at 12400- probably signaling the end of the bear market for 2nd liner stocks! Will blue chip FBMKLCI be joining it shortly?
Chart 3: FBM70's monthly & daily charts as at Oct 7, 2015 (Source: ShareInvestor.com)