With ADX currently below 20, Malaysia KLCI index appears to be in range bound. It does not appear to be in an oversold or overbought position, although it appears to have rebounded from a recent oversold position (from a stochastic perspective).

KLCI.png

If comparing to regional indices for year-to-date performance, it appears that KLCI has performed relatively better than its regional peers:

Indices Comparison YTD.png

Further, it appears that the KLCI (comprised of highest 30 market cap companies and held by most institutional funds) is doing relatively far better than the mid and small caps.

Cap Indices Comparison.png

The Producer Prices Index usually follows in tandem with movements in KLCI. The following graph shows recent divergence between KLCI and Producer Prices Index.

Producer Price Changes.png

One wonders whether the relative outperformance of KLCI is fundamentally supportable at this juncture. It will be interesting to see what will happen to KLCI upon dissolution of the Malaysian parliament.

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