Overall Q2 2012 Results – Flat and increasing cost pressure, KLCI fair value is range between 1625-1675

Based on Q2 overall corporate earning result and Q1 as an overall. Beside of a few outstanding company in our portfolio. We see a trend of flat revenue with lowering profit due to cost pressure. If there is no special factor involved, we believe the current KLCI level is already fully reflected. It may move up further due to corporate exercise or government announcement of budget. We feel that the upside is not easy to challenge until we have a better earning potential.

Revised strategy
1. Stop fresh investment into KLCI but holding current portfolio or re-investing if disposal
2. Stop M-REITs investment as overall average yield is between 5-6%
3. Diversifying cash into foreign currency and foreign stocks

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