Moreover .....
Rising question on the effectiveness of future central bank actions will be a major reason for volatility to resume in the months ahead (Sept 2016 onwards).
Concerns that the Fed will soon tighten monetary policy has been an excuse to keep cash off the table as investors want to get past the meeting on Sept 21 2016 to adjust their portfolios.
The real question which should be asked is, what have the years of unconventional easy monetary policies by central banks done to the global economy?
And the answer is simple, very little.
The local factors are the bigger concerns for the local markets.
Among the most important factors was a poor and unattractive valuation based on corporate numbers.
The corporate earnings have been poor and valuation is not attractive right now (Sept 2016) with some incidents impacting the sentiment among the small- and mid-cap sectors.
Malaysia is not cheap right now. We are not seeing growth in overall earnings and don’t see the market EPS (earnings per share) to grow.
Technically the index had breached below the immediate support level of 1,660 and has given a more negative sign for us to take note of the market.
