End of the month

Today was a rather choppy day in the international markets. With the data out of US, I thought we'd be up past 1100. But you never know as we barely made it. GDP is backwards looking while ISM and consumer confidence are more forward.

People are too concerned with the technicals whether we finish above a certain number and not enough with how the market is doing overall. Today the bulls managed to pull something out of thin air. The macro numbers helped a bit but the bears are still strong. Three days in a row, I'm leaning towards the bear stance.

A couple of days may not make the market but we better be wary of whats going on. FBMKLCI still seems to be in a strong position given the market turmoil of the last few days. I'm not really all too joyous about the current situation, but props have to be given to the Malaysian market given the general weakness in international indexes.

Recap of this week's market action

Monday for the S&P was bearish: good macro data, closed down. Tuesday was also bearish: bad macro data, closed down. Bulls did try to rally in spite of data but were promptly shot down. In a bullish market, you want to see the bulls rally in spite of bad data and vice versa for a bearish market.

Bears: 2, Bulls: 0. Bears could push the market down more but we'll just have to see. Perhaps they are waiting for tomorrow's macro and Thursday's job numbers.

I'd be moving to the sidelines temporarily. Get in the more stable names.

The EWMs didn't look too great either. No longs were willing to step in. Foreign investors are definitely selling down. I'd be moving over the sidelines at least. Today the FBMKLCI did hold even despite the sell off. But don't look for local investors to buy when foreign investors sell out.

Berjaya Retail sounds like an interesting counter

Retail counters have certainly been lacking in Malaysia. We have Aeon and Parkson. Aeon lacks valuations at this level, although this part in the economic cycle would indicate increasing revenue for retailers.

Parkson has a lot of exposure to China. Depending on the situation, it could be a positive or negative: Positive if their stores in China do well, negative if they don't. The analogy is tongue in cheek, but that brings me to my next point. Invest in things you know and you'll get less surprises.

If you want exposure to retail, you would probably want it in a Berjaya Retail or a Suiwah. I do own shares in Suiwah just for disclosure purposes. We're in this patch of the economy where low end retail stores will most likely outperform. Seven-Eleven with low product prices compared to a Jusco or Parkson, stands to do well in this slow economy.

The Singer products are also not terribly expensive compared to many electronic products out there, so the brand fits in with catering to the low end consumer. Plus the 50% dividend payout isn't too bad either. This is a name I could look to get into.

Much ado about foreign investors

Chart of the day for the EWMs, the easiest way for a foreign investor to get exposure to the Malaysian markets.

Thinkorswim EWM charts

Foreign investors haven't been net buyers or sellers during the pullback from $12 to $11.7. In fact, they have more or less been even. Yes, I'm surprised the market didn't back down off $12, but that just means we have upward momentum until we reach a price point where sellers come back in.

I don't think we are reaching new highs for the year for the overall indices. Malaysia may reach $12.30 which would translate to roughly an additional 1-1.5% or 1360-1370. The risk/reward trade off for ewm shorts are becoming more prevalent at this level and into the 1360s.

Uncharted territory

The Malaysia FBMKLCI finds itself at uncharted territory but without the European and US markets with it.

What is disconcerting today is the high fliers of the FBMKLCI have not been leading the market higher. We are talking about an Axiata or a Public Bank. Public Bank came out with "stellar" earnings yet the market yawned.


We see Genting and MISC, one of the under-performers of the FBMKLCI finish as gainers.

Underneath, we see KFC, KPJ both having problems leading the market. KFC opened at 11.5 to finish at 11.1. KPJ also opened higher then closed lower.

Nestle, perhaps the most dramatic of the high-fliers closed strongly off the highs.



Then, you get an under performing stock like AMMB closing up .6%. While the US close on Friday showed a lot of strength, this is a new week and keeping things in perspective of where the FBMKLCI is in relation to the other indexes will be key. The FBMKLCI is trading at highs while other world indexes are not. Don't buy everything out there.

Subsidy Lifting plays

If you want to get in the subsidy reduction play, companies like Petronas daganan, Shell, PLUS, Petronas Gas, Tradewinds, Tenaga are all ways to play the subsidy lifting scheme. When subsidies get lifted, inventories that the companies hold are now worth a lot more at market value. Not only that, future revenue will come in higher, which in turn creates chances for higher profits.

Certain names like Petronas Gas, Plus pay more of a dividend while people with more stomach for risk would certainly want a Tenaga or Tradewinds. A Petronas Daganan or Shell would certainly be a middle ground.

Sugar shortage news is bullish for sugar refiner Tradewinds. The market didn't trade up on the news, though. When the government lifted the sugar subsidy greater than expected, Tradewinds started to take off.

Bursa monitor to include local trading commentary

Bursa Monitor will now have a "Fast Money" type feel of a trader in addition to the material on this site.


We will tell you what is hot and where the trading momentum is. Currently we are recruiting for contributors to the site. Email bursamonitor@gmail.com if you would be interested in a trader like commentary.

Fast Money is an American financial stock trading talk show that began airing on the CNBC cable/satellite TV channel on 2006-06-21. Since October 10, 2007, it has broadcast every weeknight at 5pm ET, one hour after the close of trading on the New York Stock Exchange.^[3] The show originates from the NASDAQ MarketSite in New York City.