Weekly Overview on Market

  1️⃣ The main news over the weekend

 Democrats pave the way for Biden's $ 1.9 trillion COVID-19 rescue plan.

 - Biden: It can take 10 years to fully restore employment to current rates and needs an emergency relief plan.

 - US Treasury Secretary Yellen: Without strong relief measures, the economic recovery will be long and slow.

 - Lower-than-expected "non-farm" data.  The unemployment rate dropped to a record low for nearly a year.

 The AstraZeneca vaccine has limited effectiveness against the new South African variant of the coronavirus.

 Nigeria, the world's second-largest bitcoin market, bans cryptocurrency trading.

 - Germany plans to expand the blockade.

 - Bank of England Governor Bailey: Expect a boom in consumption after the blockade is lifted.

 2️⃣ Notable facts and data this week

 This week investors should pay attention to the speeches of several central bank officials:

 * On Tuesday, the President of the European Central Bank Lagarde joined the European Parliament's debate over the European Central Bank's 2019 Annual Report.

 * On Wednesday, Lagarde took part in a webinar on news figures organized by The Economist.

 * On Thursday, Fed Chairman Powell delivered a speech at an online event hosted by the Economic Club of New York.

 * From Wednesday to Thursday, the three major organizations EIA, IEA, and OPEC will release their monthly reports, if the report shows that the oil market is optimistic it may boost oil prices further.

Short Term Stock Tips

Bursa Malaysia to trade cautious mode next week

KUALA LUMPUR, Jan 30 — Bursa Malaysia is predicted to still trade a alert mode next week, driven by mixed sentiments by and global economic outlook.

Bhd economist Adam Mohamed Rahim said the local market was expected to ascertain thin trading holiday-shortened week, which can see the FTSE Bursa Malaysia KLCI (FBM KLCI) trading within a decent range.

The current resistance level is spotted at 1,600 points while the immediate price stands at 1,560 points, he said.

“Additionally, the general sentiment would be somewhat dampened following fresh geopolitical tensions after China warned Taiwan that an effort to hunt independence from China could mean war,” he told Bernama.

On the opposite hand, he said the increase in today’s Covid-19 cases to record high could still attract interest in rubber glove counters which structure 10-13 per cent in terms of FBM KLCI’s market capitalization .

“But, any surprise move to increase the movement control order (MCO) further could see some knee-jerk reaction within the market,” he added.

Meanwhile, Adam said restrictions over retail trading of stocks like GameStop and talks surrounding the further development of the US fiscal stimulus within the Senate also affected the mood in Asia.

“As such, glove counters were in high demand on Friday, pushing share prices sharply higher because of the calls made by some unknown investors over social media to require on the short sellers,” he added.

Despite the hefty gains within the major rubber glove counters, he said other stocks were mostly within the red amid fears that retail investors might want to enter other stocks which are a part of the composite index.

In forex market, he said that the ringgit was 0.1 per cent higher against the US dollar amid Moody’s reiteration of a stable rating outlook for Malaysia.

“Aside from that, the US dollar is facing pressure amid nervousness that crept into the greenback following trading restrictions on GameStop shares.

“Looking ahead, the ringgit could appreciate further against the greenback to succeed in 4.03 per US dollar next week if there are positive developments regarding the vaccine roll-out,” he said.

On a Friday-to-Friday basis, the benchmark FBM KLCI slipped 30.34 points to 1,566.44 from last week’s 1,596.74.

On the scoreboard, the FBM Emas Index decreased 199.81 points to 11,363.81, the FBMT 100 Index slid 189.83 points to 11,104.93, the FBM 70 declined 154.34 points to 14,747.34, the FBM Emas Shariah Index eased 861.09 points to 12,187.86 and therefore the FBM ACE Index rose 274.93 points to 11,032.94.

Sector-wise, the Financial Services Index was down 421.54 points to 14,464.06 and therefore the Industrial Products and Services Index inched down 8.16 points to 169.19, while the Plantation Index dropped 125.27 points to 7,097.89.

The Energy Index decreased 40.93 points to 793.14, the Healthcare Index was 48.06 points higher at 3,597.85 and therefore the Technology Index increased 1.32 points to 81.96.

For the holiday-shortened week, weekly turnover decreased to 25.57 billion units worth RM21.23 billion from 33.18 billion units worth RM22.61 billion within the previous week.

Main Market volume eased to fifteen .34 billion shares valued at RM17.64 billion from 18.94 billion shares valued at RM17.51 billion previously.

Warrants turnover rose to 2.04 billion units worth RM320.29 million from 1.98 billion units worth RM315.38 million within the previous week.

bursa malaysia stock tips

Malaysian Glove Stocks Fall Down

 Malaysian retail investors joined teams on social media and pushed up stocks of under-pressure rubber glove makers on Friday (Jan 29), taking inspiration from the recent GameStop trading phenomenon in the US.

Shares of the US video game shop chain surged from less than US$20 to a peak of US$492 earlier this week, after millions of amateur investors active on online forum Reddit rallied together to punish short-sellers by sending prices soaring.

In short-selling, investors borrow stock, sell it and then purchase it back at a lower price, keeping the difference. But if a stock unexpectedly soars, then investors are forced to buy it back at a loss.

Inspired by the US movement, Malaysian mom-and-pop investors Thursday set up their own Reddit group, naming it BursaBets after the country's stock exchange.

Like the US group WallStreetBets, BursaBets became an online rallying spot for those urging people to buy and hold shares, in this case, targeting glove stocks.

Malaysia is the world's top producer of latex gloves, and major producers saw their shares jump last year on strong demand due to the COVID-19 pandemic.

But the companies were hammered in recent weeks as vaccines became available and they were targeted by short-sellers after the government lifted a ban on the practice.

Malaysia Intraday Stock Picks

Nikkei 225 near lower by 1.89% at 27,663.39

There is a hint of risk aversion ahead of European trading as Asia views red for the most part on concerns regarding a retail trading frenzy as the chaos from the memes took over the market in trading yesterday and that is reflecting today.

Adding to that is talk of a liquidity squeeze in China with overnight repo rates rising to their highest level in almost six years not helping.

The PBOC did little to calm nerves as the ¥100 billion injections today is largely insufficient to deal with the liquidity shortage that may arise from the coming Lunar New Year holidays.

Elsewhere, the Hang Seng is down by 0.6% and Shanghai Composite down by 0.9%. Meanwhile, US futures are also being dumped with S&P 500 futures down 1.1%, and Nasdaq futures down 1.3% as we look towards European trading.

This is all contributing to a stronger dollar for the time with commodity currencies lagging slightly. But as we saw from yesterday, things can quickly turn around in the coming hours but just be wary that conditions may be trickier today amid the month-end.

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