Why KLCI is not moving in tandem with regional and world stock markets?...

Well, many people that I came across did ask me, hey why the KLCI is behaving in the opoposite manner particularly when the world markets rally? What the fuck is wrong with the market or am I missing something?!?
Ok, this is my answer.

KLCI is largely a local stock market with less than 10% in foreign fund manager participating on the average of 3 years. Most of the stocks in the bourse are inter-related and has many political influency due to the head of the companies particularly glaring are those GLCs.

More than 65% of the trading volume are coming from either EPF or other government institutions. The ultimate reason why we cannot move in similar trend when the world market rally is because mainly these foreign funds are not buying into the local market because of the unpredictability of the companies in terms of prospect. Why?, because the companies get contracts through networks and contacts rather than capability.

I'm not saying all who get have no capability to execute the project but rather most of these companies are stronger in their network than their ability. Unless you have very reliable contact to provide constant environment updates to you, you're expose to high risk of being caught in surprise by some decision that does not make sense in corporate world or rather the best interest of the companies affected.

Also the liquidity of stocks floating in the market is so low that many foreigh fund cannot participate and with the rule of 30% foreign ownership in local companies intact, it further adds salt to the already untasty meal.

Despite the above, I'm not saying KLCI is not a place for retailers to invest but if you compare to other stock markets like Hang Seng, NTSE, Nasdaq, Nikkei... KLCI really sucks big time hence why would big foreign fund managers even bordered with KLCI? Having said that, small investors should be even more careful especially those uncles and aunties who are buying with life savings... :)

To be successful traders in KLCI, one has to be aware of the political situation and also the relationship of the companies involved to lower the risk. You don't want to be hit later and worst not knowing what hit you.