Malaysia - Market Strategy

[winston]

Malaysian economy and business - not all doom and gloom

By INTAN FARHANA ZAINUL

External issues aside, disappointing corporate earnings in 2019 and the uncertainty of the longstanding transition for the prime minister position have caused a drag to the local stock market.

For 2020, analysts consensus and MIDF are expecting about 6.5% and 5% jump in corporate earnings thanks to a low-base effect.

Sectors such as construction, energy, and plantations have really stood up with gains seen in the year 2019.

In commodities, crude oil prices had gone up almost 25% this year, while the crude palm oil price (CPO) had rallied more than 53% this year.

Source: The Star

https://www.thestar.com.my/business/bus ... -and-gloom

[winston]

Top 20 stock picks for 2020

By TEE LIN SAY

Source: The Star

https://www.thestar.com.my/business/bus ... s-for-2020

[winston]

Malaysia Strategy
Monthly wrap-up for Dec 2019

The KLCI rose 1.7% mom to 1,588 points in Dec, in line with global markets.

However, the KLCI underperformed both the broader market and small caps.

Based on past performance, the market tends to be mixed in Jan, having posted mom -0.4%/+1.7% over the past 10-year/40-year periods.

Events to watch out for in Jan are the potential highway deals, the Fed and MPC meetings, Brexit day and signing of US-China Phase one trade deal.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... A98565D141

[winston]

CGS-CIMB advises investors to focus on export-oriented sectors

by Surin Murugiah

KUALA LUMPUR (Feb 25): CGS-CIMB Research has advised investors to stay defensive and go for export-oriented sectors like the gloves sector.

“The expected announcement this Thursday of a fiscal stimulus package to mitigate the impact of Covid-19 is likely to be delayed as well.

“As such, we expect the market to stay volatile with downside risks until there is more clarity on the new government and its future policy direction,” it said.

The research house said its current KLCI target of 1,636 points — based on 1 standard deviation (s.d.) below the three-year historical average price-to-earnings ratio (P/E) — could be downgraded post-results season to reflect earnings risks from the overnight policy rate cut and Covid-19 outbreak.

“Our preliminary estimates suggest that the KLCI target (post-recent earnings revision) could drop to 1,508 points if we lower the target P/E to 3 s.d. below the three-year historical average P/E.

“We advise investors to stay defensive (healthcare and consumer) and go for export-oriented sectors (like gloves), which will be less affected by local policy uncertainty,” it said.

CGS-CIMB Research said stocks with high foreign shareholdings (banks, gaming and Malaysia Airports Holdings Bhd) may see selling pressure if foreign investors exit the Malaysian market.

“Sectors that have done well in recent months, such as plantations, technology and oil and gas, could see profit-taking in view of negative market sentiments.

“We keep our KLCI target of 1,636 points and will review it after the ongoing results season (38% of companies under our coverage that have reported results have posted weaker-than-expected earnings).

“Our top three picks, Yinson Holdings Bhd, Tenaga Nasional Bhd and Pentamaster Corp Bhd, are intact,” it said.

Source: The Edge

https://www.theedgemarkets.com/article/ ... ed-sectors

[winston]

Potential impact from stimulus package

RM20bn stimulus package comprises mainly of RM3.5bn of federal gov’t spending, RM3.5bn in loan funds and RM10bn in EPF contribution cuts.

Key winners are consumer, tourism-related and construction sectors

The measures may be negative for Malaysia Airports.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 6A9579BE78

[winston]

World’s largest sovereign wealth fund ups Malaysia-listed equity investments

by Chong Jin Hun

Norway’s Government Pension Fund Global, the world’s largest sovereign wealth fund with a market value of about NOK10 trillion (around RM4.103 trillion) registered a 33.19% increase in its Malaysia-listed equity investments at NOK18.1 billion in 2019 from NOK 13.59 billion a year earlier, according to latest updates by the Norwegian central bank’s asset management unit.

Norges Bank Investment Management is the asset management unit of Norwegian central bank Norges Bank. Norges Bank Investment Management said on its website that it manages the Government Pension Fund Global, often referred to as the Norwegian oil fund.

In US dollar terms, Norges Bank Investment Management said the Government Pension Fund Global’s Malaysia-listed equity investments rose to US$2.06 billion in 2019 from US$1.57 billion a year earlier.

According to Norges Bank Investment Management, the Government Pension Fund Global had in 2019 invested in 146 Malaysia-listed companies compared to 152 a year earlier.

The 2019 list included AirAsia Group Bhd, Bumi Armada Bhd, Bursa Malaysia Bhd, Malayan Banking Bhd, Petronas Gas Bhd and Top Glove Corp Bhd.

Among them, Norges Bank Investment Management said the Government Pension Fund Global owned 0.42% in AirAsia Group and 0.89% in Bursa Malaysia.

“(Globally) The equity investments consists of ownership shares in more than 9,000 companies world wide. On average the fund owns 1.5 percent of all listed companies.

"Norges Bank Investment Management aims to get the highest possible return on the fund within the investment mandate set by the Ministry of Finance. We seek to safeguard the long-term financial interests of Norway's future generations through active management and active ownership,” Norges Bank Investment Management said.

Besides equities, Norges Bank Investment Management said the Government Pension Fund Global also invests in global real estate and fixed-income assets.

"Although revenue from oil and gas production is transferred to the fund, these deposits account for less than half the value of the fund. Most of it has been earned by investing in equities, fixed income and real estate,” it said.

Source: The Edge

https://www.theedgemarkets.com/article/ ... nvestments

[winston]

Is the stock market ignoring the economy?

By CECILIA KOK

Could the market be underestimating the economic damage from the coronavirus (Covid-19) pandemic, and overestimating the speed of recovery?

With soaring unemployment, declining corporate earnings and increasing number of business closures, it is difficult to be optimistic.

“The fear of missing out on an eventual recovery has drawn investors into the market to pick up heavily-beaten stocks”.

Source: The Star

https://www.thestar.com.my/business/bus ... he-economy

[winston]

Malaysia Strategy
What to watch out for in next KLCI review?

FTSE Russell is due to announce the results of its KLCI review on 4 Jun.

Malaysia Airports is at risk of being excluded as it has fallen to 38th position;

Telekom could be included as it has moved up to 26th in market cap ranking.

We expect market to stay volatile in May as it braces for potential earnings downgrade in the results season due to MCO, and persistent foreign selling.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... E1C150FD9D

[behappyalways]

Malaysia's equity market cap is US$4 bil away from surpassing Singapore's on glove gains
https://www.theedgesingapore.com/news/g ... love-gains

[behappyalways]

Retail investors are back
https://www.youtube.com/watch?v=GFlikq_7wI8