Bursa Malaysia Market Outlook by Bill Wermine

Fear, panic, doom and gloom is reaching an extreme in Malaysia as well as the world . EWM, the Malaysia exchange traded fund listed on the NYSE which represents a basket of the high quality blue chip Malaysia shares recorded the highest short interest since trading stated in 1996. That means short sellers are holding a massive short position betting that the Malaysia stock market will collapse. Discount between NAV and price is over 3.3 %, a historical extreme.

On Friday local investors paniced sold based on political uncertainty and a computer glitch which shut the KLSE system down.

These are contrary indicators and in my opinion means we are closer to a bottom than the top. A computer failure has no relation to stocks with strong cash flows, steady and rising dividends and earnings and solid managements.

Observe the Thursday closing price bar on the right edge of the EWM chart. High volume, wide spread with a long tail. It shows someone was buying into the panic. Remember over 80 % of volume in any given day is by professional smart money operators. Could be a base of support is building.

A solution to hyperinflation, currency devaluation and stock market volatility.

We will have 2 Man Hedge Fund briefings- one in Kuala Lumpur and the other in Penang. The KL event will be at the Hilton Hotel PJ Wednesday 9 July at 7 PM while the Penang event will be at the Evergreen Laural Hotel, 10 AM. on Saturday 12 JUly. At 1 PM will hold a class reunion for graduates of our Master the Markets program after the Man presentation.

These events are fully booked . Those who registered with Julie or emailed me about 60 of you should get a seat. Advise those who wish to come to come early. Martin and I will be in the lobby should there be a problem with your registration. Bring a copy of your IC and checkbook. Minimum investment is RM 50,000.

Over 46 of our traders club members have invested with us over the last year and many who have been with us for the last 6 months or longer have earned net returns of over 22 % Martin and I have invested our funds in Man.

State of the US economy which supports the hyperinflation scenario and more US dollar weakness.

Food banks across America are overwhelmed and breadlines/ soup kitchens are forming in all major US cities. ( last time this happened was in the 1930 great depression)
In San Diego, people are giving up their pets because they can not afford to feed them.
Parking lots have been converted to hostels in Santa Barbara, so that those who have lost their homes can live in their cars.
Tent cities are growing accross America for a massive increase in homeless.
Home foreclosures are up 48 % year on year.
The credit crises is destroying the capital base of most institutions.
The Dow Jones at 14,000 in October has broken 12,000 and on its way to 11,200.
Violent weather in the Midwest has devistated the corn and soybean growing areas.
Global inflation is out of control at the same time interest rates are starting to rise.
The US government is fractured and paralized unable to deal with the multitude of crises scenarios before them.
Then throw in the problems with Iran and the future level of the US Dollar.

Despite what Bernenke says do not expect the USauthorities to raise interest rates to support the dollar

Little known fact about crude oil

Golman Sachs is the largest crude oil trader in the world. They have forecasted USD 200 crude. Henry Paulsen, Secretary of the Treasure in the US used to head Goldman Sachs- he has many friends and connections there. Do you think he will pull the plug on the oil market and hurt his insider friends as well as the oil industry who are the biggest supporters of George Bush? Only when the US voters throws out the Bush administration in the November election can you hope for any relief in oil prices. It is not in Paulsen and Bush's financial interests for lower prices any time soon.

In the meantime you can ride the oil price boom by investing in the Man Hedge Fund. They have made a lot of money for my Traders Club members riding the energy trends. this year. When Obama wins in November. oil may collapse and Man will by their investment mandata be able to operate the short side

Hope to see you Wednesday or Saturday in Penang
Bill