Malaysia Portfolio Investment Calls and Stock Market Update (23 Jun 2020)

  • The Kuala Lumpur Composite Index (KLCI) today declined by 0.3% to settle at 1,507 points.
  • Markets in the Asia region were mostly down with the exception of Hong Kong who gained 1.6% today. The United States market continued its recovery path, breaching the 26,000 level today.
  • The Hong Kong market gained the most today due to the confirmation by Trump that the US-China trade deal is still intact, and the potential listings of more Chinese firms in the Hong Kong market.
  • Markets recover after an initial scare by US on the trade deal.
    Earlier in the day, markets were rattled by a comment by one of Trump’s advisor that the US-China trade deal is over. Later, Trump clarified that the trade deal is still intact, boosting markets after the intra-day. Most markets recovered from their lows in the morning to end up higher during closing.
  • Economic data out of the Eurozone indicates recovery trend moving forward.
    Purchasing Managers Index for the Eurozone were better-than-expected for Jun 2020, and were all higher than May 2020. These indicators point towards companies’ views on production moving forward, and a reading below 50 indicates weaker production. However, while most managers still expect production to be weak moving forward, most of them are more optimistic about prospects this month.
Source: Investing.com
  • To date, portfolio returns improved to 11.0% return (22 Jun 2020: 11.1%), outperforming the KLCI index at 10.3%.
  • This indicates an alpha of +1.0% for today (23 Jun 2020: +0.8%). (Note: Alpha is a measure of how much higher or lower the portfolio performs against the market. A positive alpha indicates that the portfolio outperforms the market and vice versa).
  • From a sectoral viewpoint, Automotive sector continues to outperform the other sectors in the portfolio.
    As the market has settled at the 1500 level, I am aiming to accumulate more blue chip stocks especially in manufacturing and auto sectors. Right now, investors are moving to economic sensitive stocks and are betting on a recovery down the line. I am planning to position my portfolio for the long term, but I do not expect a recovery anytime soon.

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Ho Su Wei

Ho Su Wei

An economist and an investor who is highly interested in the realm of macroeconomics and finance, and how to combine them together