When even a rescue package is pending to help those affected by virus. They chosen this time to do this is unhumantarian. No people first at all.
US trade war, new government for 2 years repairing the economy, Covid 19 and now at this point with a suggestion of change of government. It is an unwise move if based on my personal perspective and harmful to the country in many aspects for many angles.
But as an investor, we cant control the situation except we will now put everything on hold and watching for the development. As such,we suggest a strategy to watch at the sideline.
First I wish Wuhan fight hard! The virus is now somehow taken more time than I expect lately. Thus, I assume probably end of March will completely eliminate the spread. That I believe will be an optimistic view as Confidence level will drag.
Nevertheless everything is in bargain for you to pick.
We bought Bursa at RM 5.46 as we think Bursa value emerged.
As usual, we buy on value and we started to pick up some stocks. Paramount 1.29, Ecoworld 620, Cypark 1.29, Jtin 1.54 as of the virus fear. We think value is there and buying slow is our strategy.
Less Chinese tourist expected at least for 2 months. Travel stocks like Air Asia, Hotels, Casino like GENM and Genting, retails especially will be definitely hit by the first round of impact.
Minimum recovery is 2 months I expect even if the virus can be contained the spread before end of January. It will not be a good start of 2020 for retail stocks for sure.
Since 2019, we started to expand our investment strategy into start-up to improve return. We have a good invested target Buildxact from Melbourne. https://www.buildxact.com.au/. We likes their focus and aggressiveness. At the same time solving some specific problems in their industry. It simply a perfect platform for small builders. Market targeted is in Australia, Canada, UK and US.
By around December 2020 last year, we also invested into another start-up called L28 that uses blockchain technology to sell beef into its first targeted market China. https://www.latitude28produce.com/. We believe the market is very potential as demand of agriculture like genuine beef is highly needed in China.
In 2020, beside of investing into new start-up. We will also explore the potential to start up new business in 2020 given opportunity arises. Expanding our reach into different portfolio.
From both attitudes towards non war. You can be pretty sure everyone wants a living. I think 2020 will be improving as a better year. I suggest to adding weight to investment further. At least I will do so.
Into the last week of December 2019. It is indeed uneventful year with prices mostly down. We noticed except certain manufacturing related to industrial 4.0 are being supported. But we believe it is also overdone by funds.
Our strategy of keep investing but focused into blue-chip and growth stocks with strong dividend yields is indeed appropriate in review.
We bought a number of stocks across GENM, CIMB, MBSB, OSK, YSPSAH, KIPREIT, SUNREIT, ECOWORLD.
We are holding our position except selling off some INSAS for MBSB.
The market remained as the same except we believe some highly underrated stocks may perform in 2020. Our top pick remained MBSB based on managing by wandering around. We notice MBSB is aggressive and earning should improve in 2020 further with our unchanged min fair value of RM 1.50
As of OSK and Ecoworld both affected by its property biz sentiment. But they are smartly target some segments and their projects did OK as to the industry. Furthermore, OSK jewel RHB Bank is performing well and the current price only reflect OSK holding in RHB Bank. Buying OSK is like free for its property development division.
Lastly ECOWORLD, IPO around RM 1.20 and its continuous improvement towards its revenue and earnings should have a target value also above RM 1.50.
I understand lots of stocks are undervalued. But it is also true that macro and micro issues remained uncertain. But if base on our believe of no one can forever forecast a market sentiment. We can only follow or buy at depressed moment. We continue to suggest buying into the market with fundamental valuation, growth prospects and dividend policy as main consideration. We will continue to add on stocks and reducing unproductive debt ratio at the highest speed possible.
When the market condition rebound, we should reap the best from it and we are still ready to hold on for another 2 to 3 shakes in the market.