KLCI uptrend will continue with 2nd liners may be in focus

Index linked stocks advanced closing to 1800 following up with rally on Oil & gas counters. 

Yesterday, construction and developers firm are getting support.  We expect 2nd liners or smallcap stocks will takeover to push KlCI further with rotational play.
The trade war that cause lower interest rate is our main reason to believe world equities will continue flood with money that look for yield.

Central bank if israel also surprise move to cut interest rate to 1.5%.  We may expect a surprise from Bank Negara to reduce interest rate by 25 basis point in next meeting. As character of our bank negara also support cheaper RM to protect export.

Dont time the market! Just buy undervalued and sell overvalued

Many people has miss the run of the current market due to one single perception. Market will drop then only buy. But many times, the practice is the other way then people will tend sell on panic and buy during bull.

It is very difficult to time the market. If you do cycle investment like we suggested. When market down you still got cash to invest but when market up you shift your investment to defensive income stocks or REITs.

In long run, you will definitely be the winner. My advise is don’t time the market. Buy on value and sell when expensive.

Racing to lower interest rate! BOK lowered rate.

After QE3, BOJ, ECB then Australia. All pointed to direction lowering their interest rate to spur growth. Secondly lowering its currency values to increase export competitiveness. Latest is Central Bank of Korea decided to cut rate as well.

We believe the fact that world economy still weak, inflation stable due to weak buying power. Trade war increase between nations by lowering currency. He main cause started all from US debt ratio, 2009 credit crisis and QEs by FED.

The potential results are if world economy successful recovered and debt issues can be balanced. Eventually interest rate will reverse it trend. Market will start to digest or correct back. But I foresee that is going to be another years to come. By then, inflation will catch up and level rate increase resulting in potentially non pull back of all market.

Another extreme scenario is the printing money policy failed. Interest rate lowered but failed to spur growth. Debt issues cannot be balanced. World economy crash and enter into a long term correction. But it will be also many years to come.

Thus, we continue to suggest defensive full investment bias to asset oriented equities, REITs, properties and commodities. Healthy debt ratio is important when everything is creating new high. We suggest the max level is 2 times to your total investable asset.

We bought Aussie dollar again at RM 3.04

Continuous improvement on RM vs AUD provide us a good chance to hedge our foreign currency portfolio.

We don’t know how strong RM can go but we have a much optimistic view on AUD then RM. We continue Flavour RMB, AUD and SGD as our top foreign currency hedging.


MNRB sees improved interest before result announcement at RM 3.15. Spritzr advanced to RM 1.42. Affin crossed RM 3.70 and Sunway rocketed to RM 3.40.

We see the valuation is still fair and we continue recommend a hold on all above counters.

Chinese Tsunami in GE13 to be blamed? I dont understand….

From our PM Najib to Dr M, CM of Melaka, Dr CSL. Almost all pointed to a Chinese Tsunami that caused poor result of BN.

I just trying to figure it out. Malaysian Chinese has a total population of 25% +/-. Total votes to PR opposition is 50.6%. “If” 100% Chinese voted opposition. (Which is not likely at all) What are the races voted for the balance for PR – opposition?

All these politicians still dont understand statistics. Potentially that is why most Malaysian Chinese voted against you because you just dont think and listen. Ego is the biggest problem i guess.

GE13 – BN retained control but loss more seats

A result that show more parlimental seats won by opposition.  A stronger divide between cities and rurals areas. More Chinese support to the oppositions.

Economy point of view, temporary clear of uncertainty will improve the currency and the stock markets. Mid to long term performance again will need to closely monitor how BN can merge its administration with a stronger oppositions from all cities. Of course also the Chinese where the most middle class group held.

Our focus will back to global impact from now as the GE13 is temporary passed. We will consider to diversify more investment to overseas as we believed that the result will not lead to a cultural change of mindset.

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