This a quick look at Bursa Malaysia KLSE sector indexes. Check the chart for visual confirmation. Only financial, plantation, properties and construction indexes covered here. (click the chart pix for full view).
Plantation Index has the most stable and consistent upward trend. With a 'defensive sector' label and less volatile behavior, plantation index should remain in consistent trend through out 2010. Palm oil price is a factor.
Finance Index as the highest weightage group of stocks in FBM KLCI components, correlated well with KLCI. The trend is the sharpest and with the highest gain of all the sectors. By right, I think this sector should be the most sensitive to economy event and crisis.
In a way, financial sector should be the best candidate to be the opposite of plantation sector (defensive) . But as you can see, it is not the case, in fact these two sector its the most trending of all. Hint: both are FBM KLCI heavyweights.
In a way, financial sector should be the best candidate to be the opposite of plantation sector (defensive) . But as you can see, it is not the case, in fact these two sector its the most trending of all. Hint: both are FBM KLCI heavyweights.
Currently, the 'risky' part of going for financial and plantation stocks is there is no meaningful correction (say at least 20%) of the uptrend since early 2009. In fact, finance index is very near to it's all time high. Now, is the economy is so bullish, that financial stocks deserve to to go to to a new all time high? If you been reading economist and analysts 2010 outlook, they are actually still unsure or skeptical about the second half of 2010.
Properties Index and Construction Index already corrected (at least to near 20%), they are more comfortable sectors to go to. Many property stocks already started signaling buy signal on the last few trading days. There also have more up and downs which is good for trading opportunities.
In short: for the next few months, property and construction sectors looks more attractive to me compared to financial and plantation. In any case, suggest to go for mid to small cap stocks.
