Monday, March 23, 2009

Beginning of a Bull-Market, or nothing more than just a Bear-Market Rally?

The positive sentiment in the domestic market may hold up pending the Umno party elections this week and could spruce up interest in UEM Land, MRCB, KUB and Kencana Petroleum, all of which are linked in one way or another to the government.

Investors are taking on a more upbeat outlook with the continued gains at closing bell, as we observed a clearly strong sentiment on the Bursa Malaysia right at the start of the new week. Today itself, the KLCI surge 21.48 points to close at 878.3 points.

The table shows that most of the actively traded stocks posted gains.

On emerging market, Mark Mobius, Chairman of Templeton Asset Management Ltd, said in a Bloomberg TV interview that the next “bull-market” rally has begun and there are bargains in every emerging market. He based his view on the 23% jump in the MSCI Emerging Markets Index since the 4-year low of Oct 2007. This is in contrast to the 2.5% drop in the MSCI World Index and 9.5% decline in the Standard & Poor’s 500 Index.

"I have a feeling we’re at the bottom and now we’re building a base for the next bull market" said Mobius. His view is shared by few other investors and portfolio managers. Of course, investors, traders, and people such as myself would be more than happy to welcome the materialisation of their views.

The truth is, while Mobius is very optimistic in his view, personally I would think that the keyword for now is 'cautious', at least for the next few months as there are so many things that are still uncertain. The gains may turn out to be another bear market rally. No one can call the bottom in the stock market correctly and I have never come accross anyone who managed to do it. Even if there is, it is just by mere coincidence. Keep it simple, if I can do it then I do not have to work, it would be like winning a lottery everyday.

Note: MSCI Emerging Markets Index is an index created by Morgan Stanley Capital International (MSCI) that is designed to measure equity market performance in global emerging markets. Malaysia is one of the 26 emerging economies listed in the index as at 2005.


Anonymous said...

the rally is an artificial sweetener by the gomen since theres this UMNO conference. After that it will retract... haha.

donny said...

KNM is trading high volume almost everyday but the price movement is so small! Someone/syndicate is playing things up or what?