Calm before a storm?

Volatility has been relatively low for Malaysia’s FBMKLCI. Market has been directionless. Is this a temporary calmness before a major storm?

The 60D-volatility trend for FBMKLCI is shown as follows (currently at 6.85%, below historical mean of 11.4% since 2006):

GP.png

 

hvg_distribution

Market continues to be directionless –¬†read more. As such, volatility will remain low in the near term. There is no clear catalyst that will create the momentum for the index. The following shaded structured warrants have implied volatility that is relatively lower than the historical mean volatility of the FBMKLCI:

sw_list

The market requires more clarity for a market to have momentum. Let’s wait for President Trump to be officially in office or Q416 results of Malaysian corporate or upcoming Malaysian GE14 or next US rate hike.

 

DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES OR RELATED INSTRUMENTS MENTIONED ABOVE.

Author: Ken Utau

Data Scientist, Markets Analyst and Food Lover

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