Barisan Nasional's strong results at the Sarawak state elections was one of the reasons to cheer - hence pushing the local Bursa up this week. For the week, the KLCI index was up about 0.8 points, which is about 0.05% to close at 1,522.75 points. However, the KLCI underperformed as compared to its peers in the region for the week up to Thursday. The average daily trading value also declined to RM 1.55billion (about 11%), a dismal 22% below the three-month average of RM 2 billion.
I believe that the KLCI would be hovering at a support level of 1,500+ even if the market corrects further. I trust that the trend remains upwards for the various Asian equity markets, especially for the rest of April and into May 2011, to rebound from its March 2011 lows.
Looking at the immediate 1-2 weeks ahead, I believe the trend would show a slight correction, with the index testing the 1,500 mark or slightly lower.
In the past week, rubber prices declined, due to major inflations in China, raising speculations that interest rates will be increased - hence lowering demand for rubber. Despite the current situation in Japan, the local new vehicle sales surged to an all-time high of 63,265 units in March. While Japan considers major reconstruction, I think the demand for steel will very likely fall this year as all its major carmakers/manufacturers are slashing productions.
Further to that - I got sources that the Government is seriously considering a mega-merger between Proton and Perodua. What can we see out of it? A mega auto player in the region?
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