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):

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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:

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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.

 

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