Malaysia Exports Data >>> Economists expects negative Malaysia Exports data

MALAYSIA EXPORT DATA
Economists expects negative Malaysia Exports data

Today will be an economically important day for the KLCI as Bank Negara is due to report Malaysia’s Export data today.
Exports Data : Economists expects deteriorating data
Exports were down -14.9% in Dec08 and economists generally expect exports to worsen
when Jan09 exports are announced this Friday. A Reuters poll of 10 economists indicates a forecast of 24.8% YoY decline in Jan09 exports, the steepest in 30 years.

Impact of negative exports data on our KLCI
Investors would obviously like to know the impact of poor exports performance on the equity markets. Our study shows noticeable correlation patterns between regional equity indices and exports. While there is no clear links between regional indices and exports during preeconomic duress times, clear links and strong correlations can be observed during economic distress times from the beginning of 2008 till now.

Export-Heavy Indexes : Declining Peaks but support holding
The exports reliant Technology, Industrial and Plantations Index are exhibiting a trend of declining highs. However, their critical supports are still holding as of today. Will the release of the exports data finally induce a breakdown of their critical levels? If their
critical levels can hold today and Monday, it could mean that all the negativity from the exports data have already been priced in, and the potential recovery of these indexes could be a plus point for the KLCI bulls.

Strategy : Exports data to exert additional downward pressure on KLCI
In our view, the expected worsening exports data tonight will pile on the downward pressure on the KLCI. We maintain our bearish view of the KLCI. However, we are monitoring the critical support levels of the Technology, Industrial and Plantations Index to see if it can hold today and Tuesday on the release of the nation’s critical Exports Data today.