Weekly Market Update - 11 May 2015

Market Outlook 

Equity Market Outlook 

• Malaysian market is expected to experience volatility for the rest of the month due to investors’ pessimistic expectations about the 1Q15 earnings results season.
• Amidst all the market political noise, we maintain our bottom-up stock picking strategy for the funds.
• We expect the intrinsic value of the stocks to emerge once all the noise dissipate. 

Fixed Income Outlook

• Bank Negara Malaysia (BNM) maintained the Overnight Policy Rate (OPR) at 3.25% during the Monetary Policy Committee (MPC) meeting last week. This is the fifth meeting after a 25bps hike in July 2014. The current OPR level remains accommodative and supportive of economy activity. Domestic economic growth is likely to be moderate and supported by domestic demand. Stable jobs market and income growth are key drivers of the domestic demand. Headline inflation is expected to climb further due to the implementation of the Goods and Service Tax (GST) but should remain contained due to stable domestic demand conditions.
• Local govvies ended the week mixed as market players looking to take profit ahead of US non-farm payroll data release on 15 May, Friday. The secondary Private Debt Securities (PDS) market recorded higher trading volume with focus in higher credit segment (GG/AAA).

Source: Lipper for Investment Management, as at 8 May 2015
 

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