Market Review (21st Aug 2015)

The global stock market closed with a blood bath on last Friday (21^st Aug 2015)! Dow Jones index lost 531 points, or 3.13%, its biggest single-day decline since year 2011.

On Friday morning, the China government reported that its manufacturing activity hit a 6-year low in July 2015. In addition with devaluation of YUAN on last week, I believe most people are in extra worried about China slowdown. They started to in sell position which leads to a huge drop in global stock market!

Being the second largest economy country in the world, slowing down economy in China has a huge impact to the whole world especially US. I believe the purpose of China government devalued its currency is to increase the odds of Fed rate hike in September 2015. US had been hinting there will be hike of Fed rate since earlier by this year. However, even until now it’s still an open question on whether they would move or not.

With so many uncertainties in the world economic, the global market is likely to continue drop.

Back to Malaysia, our market continued its falling trend on last week and dropped to 1,574.61. Even the bull in Nikkei had started to change its direction! Investors need to beware that the global market is no longer that optimistic!

 

Being the weakest currency in Southeast Asia, Malaysia Ringgit continued to drop on last week. USDMYR had come to 4.18 and SGDMYR had come to 2.98.  I still remember last year during May, the time I went to Phuket, the exchange rate for MYR to Baht was still 9.80 but now it is only 8.54, a drop of 13%! Malaysia government defended that Malaysia fundamental is still strong and stable. USDMYR should be at around 3.20. Yeah, in fact fundamentally Malaysia is still consider good, but the negative issues of 1MDB and politics had chase most of the foreign investors away. They had totally lost confidence to our country. In addition, Malaysia foreign currency reserve no longer able to support MYR. Hence, it leads to a free fall on August! The chart tells everything. I am seriously sad for my own country.

 

 

 

The crude oil price closed on USD40.45/barrel on last Friday. It is very likely to breach below USD40 by this coming week! Gold price had shown some reversal but the world commodity metal such as copper, aluminum, nickel and zinc continued to drop to a new low.

 

 

 

With all the signals above, global market will still remain bad. Does it mean another economic crisis is coming? I will say very likely. Of course, it is just my opinion based on the current world condition. Expect the unexpected. In fact, I believe US itself is a bubble.

Just for sharing.