Friday, June 16, 2017

Market Outlook as at Jun 15, 2017

If you look at FBMKLCI or FBMEMAS, you won't get the feeling that our market is struggling. We are at the high!

Chart 1: FBMKLCI & FBMEMAS as at Jun 15, 2017 (Source:

Once you start to look at 2nd & 3rd liner stocks, you will see that many stocks are off their high & quite a few are back to their February prices. This is borne out by FBM70 & FBMSCAP.

Chart 2: FBM70 & FBMSCAP as at Jun 15, 2017 (Source:

The same picture greets us when we look at FBMACE & FBMFLG!

Chart 3: FBMACE & FBMFLG as at Jun 15, 2017 (Source:

The "strength" of our FBMKLCI comes from one sector, Finance Services. Even here, the strength is concentrated on a few out-performers, such Maybank and CIMB while others are badly mauled in the past few weeks, such as AMBANK, RHBBANK & AFG. Trading Services, with big names like Tenaga & TM, are not contributing to the "strength" in our FBMKLCI.

Chart 4: Finance & TradServ as at Jun 15, 2017 (Source:

A market that's so narrow is not a healthy market. There is so much very little that the current crop of market leaders can do if the broad market refused to participate. At some point, the market must retreat and consolidate. In fact, there are many stocks that are in a consolidating mode now. Examples include the fallen banking stocks such as AMBANK, RHBBANK & AFG. Re-positioning ourselves from Maybank or CIMB to AMBANK, RHBBANK & AFG may be a good idea since the fallen are less likely to fall further in the weeks to come.Take Taking shelter in stocks with high dividend yield stocks such as BJToto that had fallen is also not a bad idea. In this uncertain time, we should avoid chasing the fast & furious and opt for safety in the slow and steady!! As always, good luck to you all!

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