Market Review
The market rebounded in January, driven by bargain hunting activities while oil
price appeared to have stabilized, at least temporarily. The FBMS Shariah Index
gained 2.76% to close at 12,851.97pts while the KLCI rose 1.1% month-onmonth.
Small caps also outperformed, with the FBM Small cap index jumping
5.6% to 15,872pts. Average daily value traded on Bursa in January increased 16%
M-o-M to RM2.2bn. Buying was driven mainly by local institutions, while
foreigners remained net sellers to a tune of RM2.4bn in January.
Regionally, the KLCI underperformed the MSCI Asia-Ex Japan which was up by
6.48% in Ringgit terms. This was partly to the Ringgit weakness which
depreciated vs. the USD by 3.7% to 3.63 on further oil-led worries, despite a
revised Budget 2015. Brent crude oil fell 16.3% to a low of $48.7/bbl before
recovering to $53/bbl towards month-end.
The government has lowered its 2015 GDP growth forecast to 4.5-5.5% and
assumed a wider fiscal deficit of 3.2%. It also outlined several measures to
promote growth. Meanwhile, Bank Negara has kept its overnight policy rate
(OPR) unchanged at 3.25%.
Globally, monetary policy of major countries and Greek general elections
dominated headlines, primarily being the surprise move by the Swiss National
Bank scrapping the cap on the Swiss franc vs. the Euro on 16th January, leading
to a 30% intraday spike in the Swiss franc. Meanwhile, markets were buoyed by
a larger than expected QE programme by the ECB. This was partially offset by
uncertainty regarding Greece’s position in the Eurozone post Syriza’s win in the
Greek election.
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