Views, Indicators, Opinions, Economy, Updates!

KLCI now in 4 Quarter – lagging regional markets.

Hey people I am back!

KLCI as at 13^th November 2009 closing has gained 44% since 2^nd January 2009. There is lots of room for

improvements. The participation of foreign funds has to increase from better direct links from regional and

global markets. When it happen there potential is huge for the KLCI to play catching up to its regional peers. Look at the chart below.

Most markets has outperform the US and European markets. Namely:-

· Shanghai H Shares – 89%

· Jakarta – 82%

· Taiwan – 80%

· Hang Seng -70%

There are some interests from foreign participations on the banking sectors. After the recent announcements that the Malaysian economy has improved in the 3^rd QRT, a reduced contraction of 1.2% is a good performance which evidence of local companies improving too. Next is the GDP for 2010 for Malaysia has also being revising upwards. This is back up by Bank Negara decision to leave the OPR unchanged at 2% on lower inflation in October 2009. All this with funds from the money market going into the commodities too will be an added favor for the KLCI performance.

A string of reports is indicating that Asian growth will lead global recovery and it will outperform the rest too. Citi Investment Research forecast Asia’s growth at a strong number – 7.8% growth in 2010. They see that China will lead the pack with a 9.8%, followed by; India’s 7.8%, and Singapore of 6.5%. (Malaysia at 5.2%). All these are aided by inventory restocking, China being the “factory of the world” will pull Asia into a position as the global engine of growth. While this takes place USA and Europe will find time to look into their rear view mirror to get out of their bad loans issues.

Hey people! Is the current trend a healthy correction for the next impending upwards movements in most major markets?

We’ll see and what is in store for all when the annual window dressing takes place.

TJ