TECHNICAL AND FUNDAMENTAL ANALYSIS

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FBMKLCI Weekly Report - Apr 14, 2019

April 14, 2019

 Technical Analysis

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- FBMKLCI drop from 1,645.720 points from 1,630.170 points with -15.55 points.

- However, there is a deviate in a direction between FBMKLCI movement and RSI indicator. 

- Although FBMKLCI drops lower than the previous level at 1628.660 points on Apr 11, 2019, RSI doesn't drop below 20 levels (Oversold level) and FBMKLCI closed higher immediate support S1: 1626.44 level on Apr 12, 2019.

- Furthermore, RSI ended sluggishly and it started the upward trend on Apr 2, 2019.

- It is a good indicator which reflects there is buying pressure to support FBMKLCI.

- Money Infow Index, MFI don't further deteriorate and become stable in past a week.

- Resistance R2: 1709.17

- Resistance R1: 1654.26

- Support S1: 1626.44

- Support S2: 1618.32

 

Economic Analysis

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a) Malaysia Industrial Production

- There is increase 1.7% in Malaysia Industrial Production on YoY basis.

- Lower in Malaysia Industrial Production in Feb'19 majorly contributed by slower in manufacturing production in Textile, wearing apparel, leather & footwear (3.6% vs 5.4% in Jan'19) / Petroleum, chemical, rubber & plastic (1.6% vs 4% in Jan'19) / electrical and electronic products (3.1% vs 3.9% in Jan'19).

- Based on Malaysia Industrial Production data in Feb'19, we need to put more attention on company in Petroleum, chemical, rubber & plastic field.

- Their company might not able generate higher in revenue and/or EPS in Q1'2019.

 

b) Malaysia Retail Sale YoY

 - Malaysia Retail Sale YoY recorded lower growth (8.5%) in Feb'19 compare to Malaysia Retail Sale YoY growth (10.6%) in Jan'19.

- Additionally, Malaysia Retail Sales YoY also recorded lower than averaged 9.86% from 2013 until 2018.

- It reflected local markets not willing to spend more due to uncertainty market sentiment and have a impact on consumer products and service sectors in Q1 2019.

- However, there are more festivities (Hari Raya Aidilfitri, Deepavali and Christmas) and an increase in economic activities in the later part of the year. (Link: https://www.thestar.com.my/business/business news/2019/03/19/retail-industry-forecasts-rm108pt3b-sales-in 2019/#ycJKrJCdtQ438FLB.99)

- Thus, Malaysia retails sale YoY will record higher in 2nd half of year normally.

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