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.
 
 
 
 
 
Fund

 
% Growth MYR
31/12/14 to
 15/7/16
31/12/15 to
 15/7/16
 15/7/15 to 15/7/16
 15/7/13 to
15/7/16
15/7/11 to
15/7/16
15/7/06 to
15/7/16
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. 


 
 
 
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