Weekly Market Update - 18 July 2016

Dated 18-07-2016

Market Outlook

Equity Market Outlook
  • We maintain our positive view on Malaysia market.
  • We expect foreign inflows to accelerate in view of political stability and economic improvement.
  • We expect the upcoming budget to be ‘rakyat-friendly’.
  • We continue to adopt a bottom-up stock picking strategy for our funds.
Fixed Income Outlook
  • On Wednesday 14 July 2016, BNM unexpectedly cut the Overnight Policy Rate (OPR) by 25bps to 3% as a pre-emptive measure in countering the rising downside risks to growth stemming from Brexit and greater market volatility. Other motivations for the rate cut could be the delayed Fed cycle, lower-than-expected inflation and the risk from household debt have receded somewhat.
  • Local sovereign bonds rallied across the curve on the back of the yield hunting investment theme in an environment of record low yields of developed countries. The unexpected OPR cut by BNM also contributed to the increase in demand on local govvies by local and foreign investors. We expect the sovereign yield curve to flatten further. An interest rate cut is viewed as a double-edged sword as the fund’s existing portfolio is “in the money”, new fixed income investments will probably be in instruments with lower returns.
  • In the secondary Private Debt Securities (PDS) market, we also saw a higher volume in trading activities this week compared to last week, as market players came back from the Hari Raya week. About 64% of the trading volume was contributed by the GG/AAA segment and 31% by the AA segment with the remaining 5% in the A segment. Generally, PDS yields have also trended lower across ratings.

% Growth MYR
31/12/14 to
31/12/15 to
 15/7/15 to 15/7/16
 15/7/13 to
15/7/11 to
15/7/06 to
Since 1/1/2015 YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs
Hong Leong Growth Fund 7.16 -0.56 -0.05 9.42 21.81 95.99
Hong Leong Penny Stock Fund 23.06 3.57 6.08 28.71 54.27 189.72
Hong Leong Consumer Products Sector Fund 25.67 12.10 15.84 21.44 58.59 259.68
Hong Leong Dana Makmur 10.21 -2.55 -1.30 9.33 24.05 104.47
Hong Leong Dividend Fund 15.95 5.85 10.08 15.84 40.08 123.10
Hong Leong Asia-Pacific Infrastructure Fund 3.85 -1.45 0.80 3.33 -13.96 -
Hong Leong Asia-Pacific Dividend Fund 5.27 -1.12 6.12 7.92 -4.29 21.11
Hong Leong Hong Kong Equity Optimizer Fund -2.42 -9.00 -10.40 -7.35 - -
Hong Leong Balanced Fund 15.95 2.09 4.25 16.62 34.41 126.88
Hong Leong Dana Maa'rof 7.68 -1.30 -0.16 8.12 19.56 108.43
Hong Leong Strategic Fund 11.61 7.03 9.04 12.10 24.10 132.48
Hong Leong Bond Fund 6.39 3.05 3.81 10.43 20.50 56.01
Hong Leong Wholesale Bond Fund 8.01 4.00 4.90 - - -
Hong Leong Institutional Bond Fund 6.42 2.98 3.79 10.58 19.12 39.70
Hong Leong Islamic Income Management Fund 5.25 1.91 3.34 9.01 15.74 -
Hong Leong Income Management Fund 5.88 2.08 3.81 10.81 17.52 -
Hong Leong Islamic Institutional Income Management Fund II  5.40 1.94 3.54 9.72 - -
Hong Leong Money Market Fund 5.57 2.02 3.67 - - -
Source: Lipper for Investment Management, as at 15 July 2016. Past performance is not necessarily indicative of future performance. 

DISCLAIMER: This publication shall not be copied, or relied upon by any person for whatever purpose. The information herein is given on a general basis without obligation and is strictly for information only. This publication is not an offer, solicitation, recommendation or advice to buy or sell any investment product, including any collective investment schemes or shares of companies mentioned within. Although every reasonable care has been taken to ensure the accuracy and objectivity of the information contained in this publication, Hong Leong Asset Management Bhd and its employees cannot be held liable for any errors, inaccuracies and/or omissions, howsoever caused, or for any decision or action taken based on views expressed or information in this publication. The information contained in this publication, including any data, projections and underlying assumptions are based upon certain assumptions, management forecasts and analysis of information available as at the date of this document and reflects prevailing conditions and our views as of the date of the document, all of which are accordingly subject to change at any time without notice. Hong Leong Asset Management Bhd does not warrant the accuracy, adequacy, timeliness or completeness of the information herein for any particular purpose, and expressly disclaims liability for any errors, inaccuracies or omissions. Any opinions, projections and other forward-looking statements regarding future events or performance of, including but not limited to, countries, markets or companies are not necessarily indicative of, and may differ from actual events or results. Nothing in this publication constitutes accounting, legal, regulatory, tax or other advice. The information herein has no regard to the specific objectives, financial situation and particular needs of any specific person. You may wish to seek advice from a professional or an independent financial adviser about the issues discussed herein or before investing in any investment products.

Hong Leong Group   |   Download Adobe Reader
The website is optimized for Google Chrome browser 1024px resolution