The Must-Knows Before Market Opens (29/10/16)

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Weekly Top 3:

  • APM forms JV with Japan’s Delta Kogyo to serve Asean market
  • Allianz M’sia eyes possible takeover of HSBC Amanah Takaful
  • Facebook to include food delivery option


AMP Automotive Holdings Berhad (Last price: RM3.31)
APM forms JV with Japan’s Delta Kogyo to serve Asean market

APM Automotive Holdings Bhd has formed a 60:40 joint venture (JV) with Japan’s Delta Kogyo Co Ltd to develop automobile seating system for Mazda cars. APM said its wholly-owned subsidiary, Auto Parts Holdings Sdn Bhd, has entered into an agreement with Delta to carry on the business of developing, manufacturing, assembling and sale of automobile seating system for cars made by Mazda Motor Corp, including Mazda CX-5. – The Edge


Allianz Malaysia Bhd (Last price: RM10.18)
Allianz M’sia eyes possible takeover of HSBC Amanah Takaful

Allianz Malaysia Bhd, which has been looking to secure an Islamic insurance or takaful business for several years, will begin negotiations to acquire up to 100% equity interest HSBC Amanah Takaful (M) Bhd. – Starbiz


Facebook Inc (Last price: US$131.29)
Facebook to include food delivery option

Facebook would add food delivery, movie ticket purchase and salon appointment booking options (already available now) to its platform, in a move to become a one-stop shop for its 1.7bil users. – WSJ


Domestic Market

KLCI: Another round of consolidation?

klci-291016

 

Bearish below EMA20. The FTSE Bursa Malaysia KLCI index has been trending steadily lower within the bearish channel (purple) depicted above and is currently vacillating between the channel’s upper boundary and the EMA20 line. On October 28th, the Index rebounded marginally from the EMA20 line to close at 1,670.27. We opine that the downtrend would continue within the channel and should now be headed towards the lower boundary. However, as a confirmation, a closing below the EMA20 suggests traders are conclusive of the resumption of the downtrend. To sum up, we anticipate the index to decline in the immediate term with next noteworthy support at the lower boundary of the channel. – Follow us on facebook now at TaurusBrownCo to get updates on the chart readings.

 

International Market

S&P500 Descending Triangle in the Making

spx500-291016

Bearish below 2,123.4. The S&P500 index has consolidated after bearish divergence was spotted in our previous report. Notice that as the index has been rebounding from the 2,123.4 support level, but each time with a lower magnitude, by which case a descending triangle was formed. To confirm the bearish trend, a dip below the 2,123.4 support level as well as the EMA200 exposes the index to a bearish bias. All in, we anticipate a downward breakout from the descending triangle to trigger selling pressure in the index. – To know what’s next, follow us on facebook now at TaurusBrownCo to get updates on the chart readings.


U.S. Economy

econ-data
This week’s crude oil inventories held by commercial firms unexpectedly decreased by 0.6mil barrels, surprising many estimates that anticipated an oil inventory build. Although this news is perceived as favorable for the oil sector that is striving to reduce global oil glut, the U.S. Department of Energy still notes that crude oil inventories are still near the upper limit of the average range for this time of the year at 468.2mil barrels.

OPEC officials meeting in Vienna to discuss the details of their plan to reduce oil production failed to reach agreement after 11 hours of talk on Friday with Iran appearing to be the sticking point. The plan might face setbacks with Iran wanting to be exempted from oil cut to regain market share after their sanctions were lifted in January. The High Level Committee of experts will meet again in Vienna on Nov. 25 ahead of the next meeting of OPEC ministers on Nov. 30 to finalize individual quotas.

In the labour market, the number of individuals who filed for unemployment insurance during the past week (initial claims) was 0.8% below consensus, decreasing from 261k a week earlier to 258k. The number of claims continued to remain below 300k for 86 straight weeks, a threshold that signifies strong labor market conditions. With unemployment rate holding at or below 5 percent this year, fewer skilled candidates are available for openings, prompting managers to hold onto their employees.

U.S. economic growth picked up in the third quarter after a lackluster performance for the first half of the year. The 2.9% annualized growth in GDP is attributable to the increase in soybean exports that helped offset the weaker household spending. This result is in line with the Federal Reserve policy makers stating that the economy is making gradual improvement.

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