Sound similar like FED years back? Well possibly the best time to revisit Japan. Emerging market currencies will further strengthen as developed market easing monetary policy further.
RM is building a momentum of recovery. We bought some AUD below RM 3 vs AUD 1. RM also doing better against USD at RM 4.15.
We are not sure if this going to be a catalyst. But we think oil should be around USD 40 – 50 as a better value to reflect efforts of exploration.
Weakening data will give pressure for FED to ease it’s momentum for rate hike. We are not sure is this round but a good sign to end the early 2016 starting problem.
We bought CIMB, CIMB-C7, OSK, OSK-WC and OCB. We like the budget and expecting OPEC to reach a deal for production cut soon.
We like the part of having more cash released to tax payers. Mean time revised budget base on USD 30 to USD 35. Many steps suggested to maintain budget deficit at the same level.
We will buy more local stocks from now as we are confidence the economy of Malaysia will sail through this global crisis.
We always think USD is overvalued. It is traded high due to weak sentiment on world economy and perception of a potential crisis. We believe the fair value is at RM 3.50 vs 1 USD.
We bought CIMB, MBSB and Affin today. We like the price a lot but we are not sure how long low oil price is to impact the market. We repeatedly stressed that oil is currently too low for even fresh production.
All investment arms from the government may speed up mega merger to realise it’s investment value. E.g. Affin NTA at RM 4.16, RHB NTA at RM 7.94, MBSB at RM 1.71, CIMB at RM 4.68. All banking equities trading below NTA.
It is also natural to further consolidate bank and insruance in Malaysia with population just around 29 Millions.
We are firm believer that commodities are limited. Growing human population and changing climate will create in balance of demand and supply in long run. We are not smart enough to short commodities but we hope we are smart enough to long it when it is at unreasonable low.