Foreign funds are anticipated to flow back in the coming week to Bursa Malaysia, paving the way for the CI to rise to a three-month high. This run is likely to be built on the run-up to the Lunar New Year and the installation of Obama Barrack as the new president of U.S. The market may have found new impetus to take off.
The governments worldwide are taking concerted efforts to revive the global depressed economic condition, thus shedding a light of hope on the globe. With the world under the lead of the Federal Reserve trending towards a zero-rate environment, the global liquidity flow may escalate in tandem with the ultra-loose monetary condition, giving a much needed push to the market.
Added to this, Obama continues to instil confidence in the investors. The charisma of the president-elect has given the world market optimism that the meltdown might be diverted in due course.
As such, despite the flooding of negative news, Dow Jones Industrial Average is least likely to be expected to slip further down. It may move within a tight range, waiting for the next uptrend movement.
Last week, Bursa Malaysia rebounded on the external positive sentiment and the rising commodity prices. But caution yourself against heavy profit-taking. Short-term trading would be the strategy in the week to come.
The oil price may be on the fall next week in the wake of the worsening economic condition in U.S. Falling below $U.S.40 looks likely to be the immediate target. However, if the tense situation at Gaza subsides, then the oil price is vulnerable to further dip. This is not going to augur well for the oil palm stocks.
The picture shows Datuk Bridget Lai, CEO of Alliance Bank Malaysia.