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The Week Ahead (23/05/2022)

The FBM KLCI gave up early gains to close at the day’s low on Friday, while the ringgit climbed marginally against the US dollar. The index closed down 0.29 of a point to 1,549.12, its intraday low. On a weekly basis, the index added 4.71 points.

Read More: Bursa CFD Weekly

Global Economy

Mainland Chinese stocks climbed on Friday. The Shanghai Composite closed 1.6% higher at 3,146.57, while the ShenZhen Composite gained 1.82% to close at 11,454.53. China kept its one year benchmark lending rate on hold at 3.7%, but cut its five year loan prime rate (LPR) by 15 basis points. It was the second cut this year.

The Hang Seng Index closed up 2.96% at 20,717.24, while the Hang Seng Tech index spiked 4.74% to end the session at 4,284.42.

European markets closed higher on Friday, tracking global gains as another volatile trading week comes to a close. European stocks still logged a negative week, down 1.3%, as concerns about inflation and ominous earnings reports from U.S. retailers dented global sentiment.

Wall Street ended mixed on Friday after a volatile session that saw Tesla slump and other growth stocks also lose ground. The S&P 500 and the Nasdaq logged their seventh straight week of losses, their longest losing streak since the end of the dotcom bubble in 2001. The Dow suffered its eighth consecutive weekly decline, its longest since 1932 during the Great Depression.

Gold rose as a slide in the dollar and Treasury yields burnished bullion’s safe haven appeal after weak U.S. jobs numbers compounded economic concerns.

Oil prices rebounded last week as Chinese officials planned to ease restrictions in Shanghai, which could further tighten global energy supply, and as the dollar retreated from recent gains.

Company in Focus 

Sime Darby Plantation (SDPT.MY) 1Q net profit grows 28%, expects lower FFB production in FY22. Sime Darby Plantation Bhd saw its net profit for the first quarter ended March 31, 2022 (1QFY22) grow 27.76% year on year to RM718 million from RM562 million, driven by stronger recurring profit before interest and tax (PBIT), which compensated for the lower profits from non recurring transactions, a result of lower gains from compulsory land acquisition by the government.

CTOS Digital Bhd (CTOS.MY) is extending its consumer services with the launch of CTOS Car Insurance, an online platform for car insurance and road tax renewal, through its collaboration with PolicyStreet.com.

AEON Co (M) Bhd (AOC.MY) said on Thursday (May 19) prices of products sold at the retailer’s outlets in Malaysia have increased between 3% and 5% but the company has been able to delay the price hikes to enable consumers to adapt to the current inflation situation.

NVIDIA’s (NVDA) price target was cut at both Oppenheimer and Wedbush on Thursday, ahead of the company’s earnings release next week, May 25th. Oppenheimer analyst Rick Schafer trimmed his firm’s price target on the stock to $300 from $350, maintaining an Outperform rating. In a note to clients, the analyst said that Nvidia remains the industry’s “lead AI (hardware/software).”

Tesla (TSLA) was deemed ineligible for the S&P 500 ESG Index during its annual rebalance, an S&P Dow Jones Indices executive said Tuesday. The ESG Index evaluates companies’ performance in handling environmental, social and governance matters, assigning each company a score.

Under Armour Inc (UAA) shares fell nearly 16% in trading on Thursday, though inched up during the after market, after a downgrade by Morgan Stanley and the departure of its chief executive. Morgan Stanley downgraded the shares to equal weight from overweight, with an $11 price target.

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