Market Outlook as at July 6, 2015

The Wall Street Journal reported on July 2 (last Thursday) that Malaysian investigators have found almost US$700 million (RM2.6 billion) of 1MDB's funds have been deposited into Prime Minister Datuk Seri Najib Razak's personal bank accounts in AM Islamic Bank. Like all Malaysians, I was totally aghast by the allegation in this report. I have been waiting for a strong denial from the Prime Minister and further strong actions, such as a suit against Wall Street Journal, to prove his innocence. Alas, as at this morning, none of these simple acts were carried out by the Prime Minister.

The Prime Minister did promise that he would not betray Malaysians; that he did not make any personal gain; and that he may sue Wall Street Journal for the allegations. The most curious statement made was that he would not put the money in Malaysia if he had stolen it. All of these statements are lame. They are simply not enough!

Malaysians are still waiting. We deserve a complete answer from the Prime Minister. I am very surprise that the easiest way to refute this allegation (or, at least put a stop to the snowballing crisis of confidence)- by getting AM Islamic Bank to confirm that these transfer of funds did not take place- is still left hanging in the air. If we feel that this confirmation alone is not enough, surely we can get Bank Negara to reconfirm this statement from AM Islamic Bank. If the easiest route is not explored, then my concern is that the case is not straightforward. That may explain the obfuscations and accusations that we have heard & read about over the weekend.

It is indeed a very sad day for our Prime Minister- a leader who started out as a promising transformer, only to be withered down to be yet another transitioner under relentless political attack (which he may or may not deserve). For the sake of the nation, I sincerely hope that our Prime Minister can clear his name. Until then, he must put the interest of the nation ahead of his personal interest and his party's interest. He can do so by taking a temporary leave of absence while the organs of the state work to disprove the allegation against him. He must not fall for the sweet talks from his party supporters that the onus is on the accusers to prove the allegation. To rely on legalistic arguments would only diminish the office of the Prime Minister. Anyway I am sure our Prime Minister would not want to lead the nation under a cloud of suspicion. The sooner this allegation is resolved, the better it is for him, his party and the nation.

Meanwhile the market is down about 22 points as at 11.00am. We are hanging onto the support of the overturned downtrend line, RR at 1705. A break below this sliding support would trigger further selling and the renewal of the downtrend. In this dark times, we must exercise caution in the market by avoiding excessive trading position. Good luck!


Chart: FBMKLCI's daily chart as at July 7, 2015_10.00am (Source: ShareInvestor.com)