Market overview - 071110

Market overview:

• KLCI: 1511.74 - highest level after 2008 financial crisis.
• Market volume: 1.1bil - hovering above 1.0bil shares traded daily which was considered quite moderate, with little excitement happening in the market.
• Daily trading participation: It was noticed that the retailers are coming back into the market with about 35% participation, it was above daily average of about 25% before. Local institution participation maintain at 45% level and the other 20% from the foreign participation.

What was happening in the market:

• Speculative counters contributed 60% market volume with 60% active counters made up from small cap stocks.
• Commodities stocks were moving higher, due to the advance of commodities prices such as gold, steel, crude oil, crude palm oil. The main factor is the weakness of USD as US government has committed to spend USD600bil to boost the economy. Subsequently, investors were buying more commodities as safe haven, while more hot money created and flow into emerging market with higher ROI predicted.
• US unemployment rate stays at the high side of 9.6% even though the positive growth of the jobs created in the market.

Weekly trading strategy:

• Focus on hidden jewels with high growth stocks - good fundamental stocks.
• Looking for buying opportunity in commodities stocks like plantation, oil & gas, steel players.
• Stay away from speculative counters as most of them are non-fundamental sound.