MARKET REVIEW FROM HDBS

Today's Market Preview
If investors have been waiting for fresh leads to surface – thus contributed to the flattish market performance over the last five days a trigger has emerged to prompt them to take profit today.

In which case, the benchmark Kuala Lumpur Composite Index (KLCI) may
sink below its first support level of 1,070, possibly heading towards the next support mark of 1,050 thereafter.Essentially, selling pressures should intensify following the overnight plummet on Wall Street, which saw its key equity indices plunging between 2.6% and 2.9% on worries that rising unemployment data could derail the economic recovery momentum.

Back home, an update on the Malaysian economy will be watched too, with the May external trade statistics due for release today.Consensus is projecting a y-o-y drop of 28.8% for exports and 23.9% for imports, translating to a monthly trade surplus of RM8.7b.

Meanwhile, today is also the last day for the KLCI to exist in its existing form, to be replaced by the new FBM KLCI effective next Monday. Accordingly, last minute portfolio rebalancing by index-tracking funds to realign with the new constituent weightings may skew individual counters today, potentially lifting the beneficiaries (like Genting Malaysia, YTL Power, Parkson, BCHB, Public Bank)
and dragging down the losers (such as IJM Corp, Gamuda, LM Cement, PGas and MISC