Bursa Malaysia Industrial Index Long-term Chart

In view of the 3% drop in Dow on Friday, it may be good to re-visit the long-term scenario for Bursa Malaysia. As usual my long-term monitoring is based on Industrial Index which is the oldest index for KLSE with data since 1960.



The 2008 December's low due to US Financial Crisis, marked the end of major wave (IV) for the Industrial Index. Since then the Index has completed 5 mini sub-waves i-ii-iii-iv-v before the current downturn.



As what I have mentioned in my previous posts, the current pullback is a wave 2 correction. Based on past statistics, the magnitude of this degree of pullback varies from 15% to 20%. For a 15% correction, wave C of 2 can drop to a low of 2350 another 245 points to go.

Refer to the long-term chart, Industrial Index dropped 77% during the Asia Financial Crisis in 1997/98. During the US Financial Crisis, the Index dropped only 37%. I won't be surprised if the Industrial Index drops say 15% to 20% only for the Europe Debts Crisis and Euro's problem because some international investment funds may flow to Asia Pacific region after pulling out of the European markets.