EURO SQUEEZE

The euro resumed its slide as a recent short covering bounce faded. Traders said with liquidity in the foreign exchange market showing signs of drying up, investors were likely to shelter in the relative safe haven of the dollar.

The euro slipped to around $1.2300 from $1.2376 late in New York on Monday, when it lost more than 1.5 percent. Against the yen, the euro fell 1 percent to 110.53.

"Investors have started to sell the euro, believing that there'll be more banks in trouble, particularly in Southern Europe," said a foreign exchange trader at a European bank in Tokyo.

"The euro's fall has not run its course."

The South Korean won fell 2.8 percent against the dollar, its worst daily loss since March 2009, amid a sharp rise in tensions after Seoul accused its communist neighbor of sinking one of its warships.

The U.S. dollar and the Japanese yen tend to gain when there is a spike in volatility and loss in risk appetite. The dollar was up 0.7 percent against a basket of currencies

The Australian dollar extended its fall, dropping nearly 1 percent against the U.S. dollar and the yen at one point, as hedge funds and investors took profits on the higher-yielding currency's rally this year.

The fears of another financial crisis boosted the safe haven appeal of gold and U.S. and Asian government debt, with Japanese government bond futures hitting a two-year high. U.S. Treasuries also rose in Asian trade.

June 10-year JGB futures rose as much as 0.37 point to a two-year high of 140.62. The benchmark 10-year yield fell 3.5 basis points to 1.215 percent.
Ten-year Treasuries rose around 9/32 in price to yield 3.165 percent, down about 4 basis points from late U.S. trading.

U.S. crude futures fell 1.9 percent to below $69 a barrel, erasing the previous day's gains, on concerns the European crisis will choke off the nascent economic recovery.

NYMEX crude for July delivery was down $1.36 cents at $68.85.

Gold weakened in Asia due to the rising dollar, which makes the metal more expensive for holders of other currencies, after a rally overnight.

Spot gold was bid at 1,192.10 an ounce by 0610 GMT versus $1,194.95 an ounce at 1804 GMT.

Shares and euro fall as debt fears rattle markets.

Asia stocks fell to multi-month lows, the euro slid and oil and higher yielding currencies weakened on Tuesday on fears that Europe's sovereign debt woes will trigger a renewed crisis in the continent's banking sector.

Heightened tensions and talk of war on the Korean peninsula also jangled investor nerves in East Asia.

Europe's fumbling response to a Greek debt crisis and bulging deficits in other euro zone countries have unnerved markets over the past six weeks, and the central bank takeover of a small Spanish lender at the weekend stoked fears of a wider meltdown.

"This situation with the Spanish bank makes investors nervous because it raises suspicions that something else may be smoldering behind the scenes," said Hiroichi Nishi, equity division general manager at Nikko Cordial Securities in Tokyo.

European stocks looked set to dive, with futures for the Stoxx Europe 50 down 3.5 percent.

Funding conditions for banks have been tightening, with institutions in the United States increasingly reluctant to deal with firms with large exposure to Europe.

"Investors are selling into every rally in the euro," said Jonathan Cavenagh, currency strategist at Australia's Westpac.

"Worries about the euro debt crisis are showing signs of spilling over to the banking sector with funding costs rising, albeit from very low levels. All this will only see more demand for U.S. dollars."

Money markets have seen an increasing reluctance to lend, particularly for longer terms, raising fears that dollar-funding strains could further hobble troubled banks.

Report that North Korean leader had told his military it may have to go to war -- but only if the South attacks -- also prompted foreign investors to sell.

A trader at a European brokerage house in Tokyo said the slide in equities was at odds with macroeconomic fundamentals and earnings trends, and was likely part of moves by investors to cut exposure to risk, with one market player's stop-loss selling forcing another to cut positions as well.

"I don't think things will get to the point of a financial crisis, but the price action is similar to what was seen after the Lehman shock," the trader said.
Credit markets seized up and stocks tumbled after the collapse of Lehman Brothers in September 2008, marking the most dangerous moment of the financial crisis that roiled the world's markets and economies in 2007-2009.

Today’s KLCI Tracker: (21/05/2010) Friday

Overall medium technical readings say positive run is intact and but will ease a bit this week before up again.

- Expect KLCI to climb higher to test 1,350 – 1,370 band again soon. Range 1,400 – 1,410 is the next resistance.- 1,300 – 1,305 range is the immediate support; 1,275 – 1,280 is the next.

- Any pullback presents us with buying opportunities

Momentum tracker for the day:

MRCB- Medium – term positive money flow still intact and will continue- Stock is retesting the RM1.70 – RM1.80 range, eventually reaching the RM2.00 – RM2.30 band. The stock is consolidating positively in RM1.40 – RM1.55 range support.- Current pullback is a buying opportunity.

Results Note – CIMB Group (BUY, maintain) - Lower credit charge-off under FRS 139 adoptio

* Results Note – UMW (ADD, maintain)

- Inline* Results Note :

– Kossan (BUY, maintain) - A strong start to the year.

* Results Note – Nagamas International (Cease coverage) - Below expectations*

Flash Note – Kencana Petroleum (BUY, maintain)

- Outside Malaysia- U.S. stocks plunge on Europe as S&P 500 loses most in 13 months- U.S. leading index signals recovery to cool.

- Singapore economy grows more than forecast on exports- Philippines posts budget surplus amid spending freeze- Taiwan outpaces China as growth accelerates to 30-year high- Oil extends decline on euro debt crisis, U.S. recovery concern

Today’s KLCI Tracker:; (20/05/2010-Thursday)

Overall medium technical readings say positive run is intact and but will ease a bit this week before up again.

- Expect KLCI to climb higher to test 1,350 – 1,370 band again soon.

-Range 1,400 – 1,410 is the next resistance.- 1,300 – 1,305 range is the immediate support; 1,275 – 1,280 is the next.

- Any pullback presents us with buying opportunities.

Momentum tracker for the day:-

Tebrau Teguh- Medium – term positive money flow still intact and will continue.- Stock is consolidating positively in the RM0.55 – RM0.70 range before retesting the RM0.95 – RM1.00 resistance.

It has strong probability of breaking it with RM1.20 – RM1.40 levels eyed.- Current pullback is a buying opportunity.

Company Update :–

-YTL Power International (ADD, maintain)

– Media Prima (BUY, maintain) - Earnings in line.

Flash Note – Kencana Petroleum (BUY, maintain) - No go for Global Offshore* Flash Note – Alam Maritim (BUY, maintain) - Proposed 1 for 2 bonus issue*

Economy :

– World Competitiveness Yearbook 2010

- Malaysia is ranked 10th most competitive nation* Outside Malaysia- U.S. stocks drop on German trading restrictions, foreclosures.

- U.S. consumer prices unexpectedly decreased.

- Australia consumer confidence falls most in 19 months.

- Crude oil extends gains after euro climbs from a four-year low.

Today’s KLCI Tracker:- (14/05/10)

Overall medium technical readings say positive run is intact.
- Expect KLCI to climb higher to test 1,350 – 1,370 band again soon. Range 1,400 – 1,410 is the next resistance.- 1,325 – 1,330 range is the immediate support; 1,300 – 1,305 is the next.
- Any pullback presents us with buying opportunities.

Momentum tracker for the day:-
Unisem- Medium – term positive money flow still intact and will continue- Stock is retesting the RM3.50 – RM3.60 range, eventually reaching the RM4.00 – RM4.50 band. The stock is consolidating positively in RM3.00 – RM3.20 range support.- Current pullback is a buying opportunity.

Today’s Fundamental Highlights:
– Banking (OVERWEIGHT, maintain) - 2nd round OPR hike*
- Company Update – Sime Darby (ADD, maintain) - Negative impact of RM964m in 2HFY10*

- Outside Malaysia-
- U.S. stocks fall as banks, retailers decline; Cisco retreats- U.S. import prices increased 0.9% in April on oil.
- U.K. trade deficit widened in March on import jump.
- Thailand’s confidence falls a third month on protests- Oil poised for second weekly drop on dollar’s rise against euro.

Today’s KLCI Tracker. (13/05/2010)
Overall medium technical readings say positive run is intact- Expect KLCI to climb higher to test 1,350 – 1,370 band again soon.Range 1,400 – 1,410 is the next resistance.- 1,325 – 1,330 range is the immediate support; 1,300 – 1,305 is the next.- Any pullback presents us with buying opportunities.

Momentum tracker for the day.

MRCB- Medium – term positive money flow still intact and will continue- Stock is retesting the RM1.70 – RM1.80 range, eventually reaching theRM2.00 – RM2.30 band. The stock is consolidating positively in RM1.35 –RM1.50 range support.- Current pullback is a buying opportunity.

Company Update – Berjaya Sports Toto (REDUCE, downgrade)

Results Note – Dialog Group (BUY, maintain) - A satisfactory set of results.

* Outside Malaysia-
-U.S. stocks advance, erasing S&P 500’s loss from May 6 plunge.
-U.S. trade gap widens as growth rebounds.
-Europe’s economy grows at faster pace than forecast.
-Philippine exports rise the most in at least 29 years.
-Oil trades below US$76 after falling as U.S. stockpiles increase.

How To Make Money On The Stock Market.

The fact was this: 80 percent of private investors lose money in their direct investme

This is the secret that Wall Street does not want you to know. I guess it could be worse. I remember reading some years ago that 97 percent of all gamblers in the UK lose over time.

There are several reasons for why the majority of investors lose money. The main one is almost certainly due to knowledge. Whilst it is not my intention to suggest that insider knowledge is used, it is hard to imagine that some unscrupulous traders are not involved.

What is more important is that many or most private investors simply do not conduct enough research into the firms in which they plan to invest. Company accounts are not looked at or only briefly. Competitors are not assessed thoroughly.

The stock exchange is a very competitive place to make money. All those red braces wearing investment banker types take the game very seriously and so should we private investors if we plan to win.

In fact, the stock exchange is so competitive that at times even some of these investment banks fail to make a profit, despite all the advantages they hold over the rest of us.

Therefore, we private investors need to work very hard to compete. It is possible. The markets are so large that many private investors can earn a comfortable living online.

It is also vital to be disciplined and to follow investments and companies of interest very closely. If you need to sell out at a moments notice, the discipline to do so is required immediately. Failure can cost you your profits and potentially your initial investment as well.

As prices change, so must your goals. Using a stop loss or some variant can help your selling strategy, but when it is time to sell, you must.
Before you start on your own private stock exchange odyssey, you need to invest time and effort to learn the basic (and some more advanced) skills. These will help you for years to come.

You then need to commit to continual improvement in your knowledge and skills. This is what will keep you up with 'the game'.
You may also find that you need some form of computer monitoring software. Many of the services allow real time price data. This will help you to accuately track your performance over time and alert you to any important news about your companies. For medium to large investors, such software is worth its weight in gold.

As time passes, you will need to understand the basics of asset allocation. This will help to prevent you from having all of your net worth tied up in company stocks and thus will help to provide more stability to your personal finances. As your net worth grows, it becomes ever more important to be diversified so that your future is tied less and less to the results of the stock exchange.
In conclusion, the stock exchange is a place where fortunes can be made and lost, but only the hard working are likely to prosper.

Good luck.