Market Review
February was a relatively good month as signs of stabilization in many of
international economies has emerged. Eurozone continues to improve as data
have recently surprised on the upside. On a high note, Greece has managed to
secure the four months extension on its bailout program. Also, the Fed's
indication that the interest rate will not be hiked anytime soon help boost
market sentiment around the world. Elsewhere, China has recently cut reserve
requirement ratios by 50 bps to provide further boost amid weakening data and
Japan appears to stabilize as continuous Yen depreciation supported the
economic growth. Meanwhile, crude oil price rebounded to US$62.6/bbl in endFebruary
from January low of US$49/bbl.
On the domestic front, corporate earnings released during the month were not
as bad as feared. For the month, the KLCI gained 2.2% or 40pts to close at
1,821pts. The broader market continued to outperformed, with the FBM Emas
Shariah Index gaining 2.1% m-o-m to 13,121pts. Small caps performed even
better, with the FBM Small cap index gaining 4.7% to 16,620pts. Average daily
value traded on Bursa in February was down slightly by 1% m-o-m to
RM2.19bn.The Ringgit initially reacted positively appreciating 2.5%, but closed
largely unchanged at 3.60, possibly on the back of 1MDB solvency concerns. This
is reflective of the rise in 10Y MGS from 3.83% as of end-January to 3.87% as of
end-February. Malaysia’s projected GDP growth rate of 4.5-5.5% for 2015
remains one of the world’s best growth forecasts, thanks to its strong
fundamentals, robust trade and strong monetary policy.
-page-001+copy.jpg)