Weekly Market Update - 3 April 2017

Market Outlook

Equity Market Outlook

• Recent data shows that the economic outlook for the US remains solid.
• We are of the view that the economy is unlikely to be derailed should the corporate tax reform is not successfully implemented.
• We remain positive on the Malaysia market
  • Foreign shareholding is low and cumulative foreign inflows is still near Global Financial Crisis (GFC) level
  • Inflows should resume should risk sentiment improves as the US economy improves
• The funds are positioned in some export stocks, large cap stocks that have been sold down and sectors that may benefit from government pump-priming such as consumer and construction sectors.

Fixed Income Outlook

• US yields shifted lower post Federal Open Market Committee (FOMC), 10 years down 18 bps to 2.39% from a high of 2.60%.
• On the local front, Malaysian Government Securities (MGS) curve remained flat week on week; flows were decent week on week despite the auctions. Local government bonds are still supported on the back of domestic demand evidenced by the healthy book to cover ratio (BTC). Demand for short tenured bonds remains lukewarm.
• Primary deals Public Bank Berhad Subdebt/DIGI/UEM are issuing this week. Will position funds to buy some of the primary provided yield is enticing.

Source: Lipper for Investment Management, as at 31 March 2017. Past performance is not necessarily indicative of future performance. 

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