BOJ – negative interest rate

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.

Sign of weakening US data and OPEC proposed 5% output cut roar market

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 are positive on revised budget 2016

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 bought more banks today

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. 

Treasury arms may create mega merger to realise values

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. 

Commodities will rise again before testing new low

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.

We added MNRB, OSK and PBA

While the market corrected substantially last few days. We seen value and bought MNRB below RM 3, OSK at RM 1.56 and PBA at RM 1.20.  We will continue bargain hunting but at a slower pace.

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