Malaysia Portfolio Investment Calls and Stock Market Update (14 May 2020)

Disclaimer: This research should be used purely for informational purposes and is my own personal opinion. I bear no responsibility to whatever investment decisions taken by anyone with regards to this research.

The Kuala Lumpur Composite Index (KLCI) today is unchanged at 1,397 points. Around the region, most markets were down, especially Singapore (-1.8%), Japan (-1.7%) and Hong Kong (-1.4%) as Fed’s chairman Jeremy Powell warns of a slow economic recovery in spite of fiscal support to the US economy. On the other side of the world, the Dow Jones contracted by 2.2% to close at 23,248 points.

I don’t find this surprising as I have warned repeatedly that markets have not taken into account the dire economic news that will come from this perfect storm of Covid-19 supply and demand shock, low oil prices and tensions between United States and China. I have also added 2 companies into my investment portfolio calls, which are :-

1. Formosa Prosonic (BUY; Target Price: RM1.68): Manufacturing company producing sound systems. Currently undervalued at 8x price earnings ratio, with a strong track record of revenue growth (Avg 2015–2019: 26%). Target price of RM1.68 is a conservative valuation with 5% decline in revenue in 2020, and a growth of 6.5% subsequently.
2. Gamuda Berhad (HOLD; Target Price: RM3.42): Construction company involved in infrastructure and property sector. Fairly valued currently with limited share price appreciation as the company incurs heavy capital expenditures for machineries.

For the Malaysian companies I am keeping track, most of them are still up. The best performing companies in terms of share price are Lotte Chemical Titan (53.4%), Padini (32.0%) and Cocoaland Berhad (14.0%). To date, the portfolio of companies I am keeping track on have moderated to 6.6% return (12 May 2020: 9.8%). You can have a look at the companies I am keeping track on in the Google Excel sheet here or the table below.