With greater uncertainty ahead, different analysts offer differing views. Some are bullish, some are bearish. In such situation, we have to analyse historical patterns in order to forecast possible future movements for the stock market. Using FBMKLCI as a case study, the following historical monthly data of FBMKLCI have been extracted:
Based on our high-level desktop analysis, it is observed that:
- Best performing year of FBMKLCI (since 2004) is 2009 with annual index movement of +31.12% whilst the worst performing year is 2008, with negative movement of -64.82%
- Worst performing month of FBMKLCI is August, with lowest probability (i.e 33.33%) of a positive month-on-month movement
- Our year end target forecast for FBMKLCI for year 2016 is 1,707.3 (average) and 1,646.7 (sensitised). In relation to 2017, we expect the FBMKLCI to trade range bound (average: 1,707 – 1,790, sensitised: 1,659 -1,786)
- Nevertheless, in this analysis, we have not considered potential impacts resulting from specific events such as US Presidential election, US rate hike, Brexit plans, Malaysia GE14 and volatility in crude oil / O&G sector
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