KLSE (Bursa Malaysia) New Year

Selamat Maal Hijrah, Happy New Year and Coming Chinese New Year.

Embrace yourself for 2009. It said this year's economy going to be bad, both global and locally. When Pak Lah say we will not enter recession and we are resilient, I hope he's telling the truth and will not change his mind later. The world giant's (US) economy still collapsing (look what happened to their motor vehicle industry) . Some even said the free market based economy that we have been holding dearly for centuries is faulty. When a well known economist  start putting a blame on a theory, it spells trouble.

For KLSE, we have an annual event that we loved, that is pre-Chinese new year market rally. Yes and so far for this year it started great. Now since this year's Chinese New Year holiday falls end of January (not in February anymore), we don't have much time for that. The number is less when you allowed cashing in days.
I am optimistic for the market  (in fact it already started) toward this Chinese's year of the Ox*. In fact I am more optimistic for this first quarter (than I though I would be). The key reason is some important commodities' prices raising. The CPO's scene is improving and so does crude oil.  Inline with that, many plantation counters started good this year and I believe it will spill over to the whole first quarter.

Beyond first quarter? I doubt about it. Statistically, mid of the year period itself  usually the bad period compared to first and last quarter. Also with current global situation, many will wait for first quarter's financial data and earning. The question will be "Does this year outlook improved so far?",  "Does last year bail out bring result?" and so on. Some say, expect the unexpected. How you are you going to argue with that. Let second quarter come and we will see.

Technically, the current market is on improved volume (check KLSE Composite Index daily chart below). See the volume on the first three trading day of the years. Oh, the fund manager really itchy to play the market now after a long December holiday. My short-term target for KLCI is 990 pt.

In short, I will say I am bullish on this first quarter. For me it lies on rising commodities' prices especially CPO. With rising crude oil, already high  soy bean's price, and expected reduced CPO supply, it's a better outlook for CPO. Thus, plantation counters will be high on my list: IOICorp, RSAWIT, KLK. ASIATIC, IJMPlant etc. Don't forget about rubber producer, an analyst told me rubber could be the theme-play now. KOSSAN already went far ahead, I will not chase that but will check others. Said that, better check the charts from time to time for confirmation. Other thing maybe to look for this year are shares with buy back event. With lower cost of buying, cash rich companies will take the opportunity to accumulate.

Wish you the best for 2009.
* that in contrast with previous Ox years :1997 and 1985 are big bear markets

Below: KLSE Composite Index Daily Chart (click the image for a full view)
Below: IOICorp Daily chart
ioicorp  Below: RSawit Daily Chart
Below: IJMPLANT Daily chart

Below: ASIATIC daily chart