Tuesday, December 01, 2020

Market Outlook as at 1 December 2020

Yesterday, the index plunged in the last minutes of trading- adding 24 points to the earlier 20-point drop. This caused the FBMKLCI to plunge a head-spinning 44 points to end the day at 1563.

Chart 1: FBMKLCI's 15-min intra-day chart as at 30 November 2020 (Source: Malaysiastock.Biz)

The daily chart shows that the index is now resting on the horizontal line at or near 1560.

Chart 2: FBMKLCI's daily chart as at 30 November 2020 (Source: Malaysiastock.Biz)

Everyone with some investment in the stock market would be sitting at the edge of the seat and woul be wondering "what happened?" It does not help if you were to look at The Edge CEO Morning Brief this morning. The headline below is suggesting that there is a reason for the selldown. If that's true, then the selldown might continue. 

That's not the case. Even if MSCI review is taking place- and this happens on a regular basis- no fund manager would selloff his shareholding indiscriminately, like what happened yesterday from 4:45-4:50 pm. The last minutes selldown yesterday- like sudden huge rallies at the last 5 minutes of trading at the month-end- is very likely driven by fund managers to show a different view of their books. It is also possible that it may be carried out to affect the index in order to give a different settlement value to the expiring futures contracts.

At the opening bell this morning, FBMKLCI has rebounded with a 25-point gain. Now, it seems the chase for bargains is on. To everyone who was worried sick last night, I can only wish you a happy hunting today!!

1 comment:

Jim said...

Hi Alex, can you comment on Media & MediaC ? Thanks in advance