If just MSCI adjustment, China slow data, unstable growth US data are the culprint. We just think it is not enough to cause a major dip. We think the market is oversold and near term rebound is likely. However, we will continue to buy if market correct further.
Both CIMB and Maybank may drop further after this adjustment. But we will accumulate if price falling further. It will be good we start tracking if MSCI does has impact or they just don’t understand our market at all. CIMB closed at RM 4.40 and Maybank closed at RM 8.490 as of 13 May 2016.
We have disposed ECOWORLD completely on the basis of continue weaken global markets. We do not expect any quick recovery for property companies. We also disposed mildly INNITY and changed to Alliance, MBSB & SUNREIT.
We continue to buying up MBSB on its value leap after become a bank. Alliance for its strong management and consistent result. Finally any REITS portfolio that with medical center as it portfolio.
We will continue to bargain hunt if market weakness persist as we believe the market is in the path of recovery. However, mid to long term risk remained.
There are only 2 things we worry that will affect the world markets in short term. Unpredictable climates and US protectionism presidential candidate Donald Trump.
As risk of further slowdown building up, we have our new suggested portfolio allocation for year 2016/2017. We will reduce equities to 30% but increase our allocation in REITs, Hedge Fund and Cash. In the REITs portfolio, we will focus into Singapore REITs or medical assets associated REITs in Malaysia. As Singapore has surpassed Hong Kong as 3rd largest financial hub of the world. We believe activities will persist and grow further in years to come. As medical centers related REITs are expected to do well due to lack of hospital in my view. We think an average of 6 to 7% stable yield can be expected from associated REITs.
We recommend increase in hedge particular Gold, foreign currency and oil (if applicable). As we believe the continous low interest situation and debt mounting issues will eventually move Gold and Oil back to the high side. We also will build up more cash into fix income investment. As we believe a more volatile market will provide opportunities for more cheap asset available. We believe it is time to reduce any debt level soonest possible.