Weekly Market Update - 11 April 2016

Dated 11-04-2016

Market Outlook

Equity Market Outlook
  • Market has been range-bound lately. We expect market to trade within a tight range for some time.
  • We remain positive on the Malaysian market. We prefer large cap stocks that were sold down and high yield stocks.
Fixed Income Outlook
  • The 1Q2016 ended with the Malaysian Government Securities (MGS) curve bull-flattened along the short end as a combination of dovish sentiments from major central banks, Ringgit strength and foreign inflows pushed the MGS curve lower. Near-term, the continuation of such momentum may force the 10y yield down to 3.70% and the MGS curve may stay supported well into 2Q16. But nearing the 3Q2016, unless the Overnight Policy Rate (OPR) cut expectation become more entrenched, we may expect an upward correction in yield with a target of 4.00% for the 10y MGS yield.
  • We saw strong auction bids in 1Q16 especially in GII auctions as investors seeking relative value in Government Investment Issue (GII) vs the MGS. The biddish trend may extend well into 2Q2016 before tapering down later the year as observed in the past few years possibly due to front-loading of demand.
  • The announcement of the new Bank Negara Malaysia (BNM) governor could set the market tone in April. That aside, market will watch closely on the Monetary Policy Committee (MPC) meeting outcome on 19 May. Recent release of weaker leading economic indicators pointed to slowdown in 1Q2016 GDP growth. Should the economic slowdown becomes unexpectedly deeper and more entrenched, we see the possibility of a 25bps OPR cut in 2016. The money market deposit rates will inevitably adjust lower should there be a cut in OPR.
  • As at 8 April, the week ended with Ringgit Malaysia weakened against the US dollar as the concern about a global slowdown put pressure on the Ringgit Malaysia.

% Growth MYR
31/12/14 to
31/12/15 to
 8/4/15 to 8/4/16
 8/4/13 to
8/4/11 to
8/4/06 to
Since 1/1/2015 YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs
Hong Leong Growth Fund 4.03 -3.46 -7.97 15.09 18.08 87.34
Hong Leong Penny Stock Fund 18.81 0.00 2.80 36.82 49.67 181.09
Hong Leong Consumer Products Sector Fund 17.63 4.93 5.20 21.05 56.07 238.61
Hong Leong Dana Makmur 11.33 -1.56 0.57 18.46 22.73 103.35
Hong Leong Dividend Fund 12.67 2.86 4.75 19.25 36.70 110.34
Hong Leong Asia-Pacific Infrastructure Fund 1.09 -4.07 -6.23 -8.74 -20.83 -
Hong Leong Asia-Pacific Dividend Fund 2.41 -3.80 0.05 -1.91 -10.28 10.35
Hong Leong Hong Kong Equity Optimizer Fund -7.22 -13.48 -16.24 -13.24 - -
Hong Leong Balanced Fund 13.99 0.37 3.80 21.20 31.94 122.58
Hong Leong Dana Maa'rof 8.46 -0.59 2.18 12.51 19.04 109.76
Hong Leong Strategic Fund 4.66 0.37 -0.88 13.15 16.67 117.53
Hong Leong Bond Fund 4.99 1.69 3.77 10.10 20.76 55.05
Hong Leong Wholesale Bond Fund 6.06 2.13 4.51 - - -
Hong Leong Global Bond Fund -10.86 -3.57 -13.10 -14.68 -3.52 -
Hong Leong Asia-Pacific Income Plus Fund -1.11 -0.76 -3.64 1.71 - -
Hong Leong Institutional Bond Fund 4.97 1.57 3.64 10.17 18.88 39.20
Hong Leong Islamic Income Management Fund 4.27 0.96 3.29 8.98 15.56 -
Hong Leong Income Management Fund 4.82 1.05 3.77 10.57 17.22 -
Hong Leong Islamic Institutional Income Management Fund II  4.45 1.02 3.50 - - -
Hong Leong Money Market Fund 4.55 1.03 3.62 - - -
Source: Lipper for Investment Management, as at 8 April 2016. Past performance is not necessarily indicative of future performance. 

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