Weekly Market Update - 13 July 2015

Market Outlook

Equity Market Outlook

• Regional markets experienced heightened volatility in recent weeks due to possible Grexit and negative market sentiment in China.
• We took the opportunity to add equity exposure to our funds as some stocks were trading at attractive levels.
• We are positive on the market outlook for Malaysia. We continue to employ bottom-up stock-picking strategy for our funds. We still like sectors that will benefit from the depreciating Ringgit and high-yield stocks.

Fixed Income Outlook

• The week began in a risk-off mode due to the “No” vote in the Greek referendum. However, towards the latter part of the week, positive developments in negotiations were made and the market corrected. Over the week, the Malaysian Government Securities (MGS) market fell with yields rising 2-7 bps. The curve steepened on the short end, where the 3-year benchmark rose by 7 bps. We think the developments in Greece will probably not have a material impact on the local bond market. However, events in China will have to be monitored closely as they could pose a domino effect to the regional local bond markets.
• In the July Monetary Policy Committee (MPC) meeting, Bank Negara decided to maintain the Overnight Policy Rate (OPR) at 3.25%, in line with expectations.

Source: Lipper for Investment Management, as at 10 July 2015
 

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