When so many people is forecasting a downfall again. We believe the cycle of the economy may start to recover in 2017.  However, we are not expecting a sharp U turn but a gradual recovery. 

US rate hike is inevitable but we do not forsee a strong reverse as well. Flat rate or negative rate are giving negative impact for the world economy. But whatever done cannot be undone.  A mild increase in US may also stop other countries in further devalue their currencies. (If you follow our stories all the years).

We see US, China, India and ASEAN will fuel the growth but not Europe.  Japan abenomics is still a question. But we believe the growth overall will recover.

Together with the return of stable oil price between USD 50 to 60 or even higher. Crude oil Economy will also rebound with gradually as well.

We are optimistic the cycle of downturn may have bottomed.  But the recovery may take a very long time and bumpy.  The ultimate crash of the whole world may not be in this round but can be still a strong possibility years ahead.

We remain our top picks and continous purchase while price on weakness.

Top Picks

1. MBSB
2. CIMB
3. EIG
4. Alliance

Mild Collection

1. OCB
2. Paramount
3. Cypark
4. OSK
5. Luxem
6. MNRB

Speculative Play

1. Gadang
2. Gamuda Warrants
3. OSK Warrant

MREITS 

1. MQREIT 
2. TWREIT 
3. ARREIT 

Though the budget has some allocations for people in need. We are completely unconvinced giving out money for those low Income level defined.  The money should be focused into mid to long term segmented education development.  Giving out money is never a good approach even in developed Economy.   

Many tweaks here and there for property segment. Overall we think it is going to be lacklustre again in 2017.  But we still believe another round of rate cut is on hand before year end will be good enough.

A not very exciting budget and not so straight forward policies may harden the execution of the budget and incentives.  

In short, we do not see an exciting budget which I believe during this special period. An increase deficit is the right move but focus into high impact and straight forward areas.  

In relation to stocks watch over budget.  Mostly GLCs in construction, finance and properties are going to benefits from budget 2017.  

China consistent growth of 6.7% supports our confidence in mild recovery for 2017.  Our perspective on mild growth, mild inflation will be the character of 2017.  In fact a long period to come will be the same situation.

If base on reverse of rate hike trend.  Possibly between 25 to 100 basis points in next five years.  We don’t see the fair value truly reflected.  We think USD is over bought and possibly peak in sentiment very soon.

I don’t know what are those Fund managers comments about loyalty. Yes, there are always Android users and there are lots of Apple fans.  But they have forgotten also most gadget users can hang around two OS.  At least there are neutral users for that segment will likely to go to Apple.  

RM already weaken a lot since 2 years ago.  Personally I don’t see it is important worry if another round of rate cut will impact too much.  On the other hand, it will help to boost internal consumption that we see things gradually turning around while still fragile.

We have closed off all futures positions except Apple with continuous long position held.  Sterling dumpling, Oil back to above USD 50 and heading to USD 60.  Bitcoins staying around 600.