KLSE indices weak support

KLSE 3 consecutive up trends looks like , sounds like a “surge of confident”. However, if one look closely, you will notice it is nothing more than “Twin Tower Indices stock” gain.  As usual, Bolehland stock market are driven by the two “Twin tower” : financial and plantation.

Despite Malaysia government talking “Knowledge economy”  for the pass 10 years, little is done to transit the production economy towards knowledge economy.

Just look at KLSE indices, you will notice consumer and trading services indices value are no more than 1% of financial + plantation. Before the global financial crisis, combination financial + plantation respresent 80% of total KLSE market value.  Today, during global financial crisis,  the comobo are now surge to 88%.

That means, the total market value of listed company under construction, consumer, industrial product, mining, property , tehcnology and  trading, already retreat and only represent 12% of KLSE value.

This is a grave inbalance to the country economy.

Failing to diversifies the industrial, make Malaysia susceptible to turbulence market influence on those “pillar industry”.  The recent KLSE rebounds due to oversale. However, as long as other industry doesn’t show a sign of rebound, it will hurt the finance and plantation industry.

The worry is, once Bolehland injecting too much money to “curtain” plantation and finance industry,  what will happens to other industrial when the recession hit the shores. Does the government shelves enough funds for them?

One Response to “KLSE indices weak support”

  1. Jefus

    You are right, we have never or just inched ourselves aways from crude oil and palm oil. If you look at the components of the KLCI, the heavy weights remain the same counters. So, of construction, palm oil / commodities are not moving then we are dead in the water.

    The laggards are financials, commodities, and soon, construction ( you should tell me – brick and motar? ). And they comprise the heavy weights in the market. (Excluding Tenaga and Telekom and MISC of course )

    However, earnings are given out in quarterlies, so, there will be a lag period of past data and present situation. We’d need to look at items that may influence future performance. How deep the present recession will cut into our pockets will depend on how fast recovery can take place.

    The oversold situation in the market is a mere indicator. How much is oversold? 50%, 70% 100%? A pulse of the market sentiment, that’s what it is. And fundamentals are three months behind in reporting. So, you are on your own , you’d need to make the decision. In or out? How do you make of the market?

    Government support is pittance. RM7bill is peanutz. We will need foreign investments, hot money, hedge fund players…. the usual suspects of a casino. Take a look at the total turnover daily,…. is that the government playing the market? I think not.

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