THE FBM KLCI fell on early trade Tuesday but regained positive momentum in the afternoon, led by gains from banking stocks including CIMB and RHB Capital. Both stocks closed higher after the proposed mega merger was widely reported to have been called off.

The benchmark index has now closed in positive territory for four consecutive days. On Tuesday, the index added 13.82 points to close at 1,748.90. Market breadth was positive with gainers outperforming losers 1.6 to 1.

Despite the headline gains on the local bourse, news flow concerning the economic climate continues to be weak. Crude oil is still falling, with the Brent crude hovering around USS$46 per barrel (at the time of writing) and the ringgit weakened to RM3.59 versus the greenback from RM 3.57 on Monday.

Regionally, markets closed mixed. China stocks were up for the first time in four days after positive trade export data bolstered investor confidence. Market indices in Europe also opened higher Tuesday despite weakness on Wall Street overnight.

I continue to be cautious on the outlook for Malaysian equities and have therefore kept my portfolio unchanged with a high cash holding level.

Currently, I am only holding Willowglen, which went down 1 sen to close at 73.5 sen.

My portfolio is currently registering a gain of 1.0 % since inception, and has still outperformed the benchmark KLCI by 8.6%.

This article first appeared in The Edge Financial Daily, on January 14, 2015.