Malaysia is attracting savvy investors now.

23 Feb 2019

Dear Fellow Investor,

Last week, I reviewed some of the reasons why Malaysia should be on your investment radar screen now.

Attached is a report from Motley Fool Singapore as to why Malaysia is attracting savvy investors now.
Motley Fool Report

This is a promotional piece for their newly launched Malaysian share market research service.

What is surprising is that I have been a member for 3 years  to their Singapore service which focuses  mainly on the Singapore and US markets and now they are recommending Malaysia. Motley has helped me to find opportunities in Singapore for our global wrap accounts and we have made reasonable equity as well as currency gains .

I believe their thesis about Malaysia is correct however;

We have a big advantage over them as we have our dedicated local research term, our industry connections and  local on the ground knowledge.

We are also able to focus on lesser known under researched companies that offer growth and income.

We should soon be starting our investment club in March  which will meet on Saturday once a month in my office at Phillip and  we will share some of these opportunities.

I have some personal observations about Why Malaysia Now :  in addition to the Motley report.

·      For most of the last 2 years futures prices on the composite index futures contract have been trading at a discount. That means sentiment has been extremely negative . Now the discount has narrowed to about even which means professional buying including foreign funds.  In order not to tip their hand professionals are slowly in a low profile way accumulating blue chip shares.

·      EPF paid a generous dividend this round of 6.2 %and EPF outperformed over 98 % of all Malaysian unit trusts. The reason they outperformed is that they hold 50 % of their assets in MGBs ( Malaysian government bonds)  In a pessimistic and gloomy atmosphere bonds outperform stocks as well as pay steady safe income.   MGBs are ultra safe. Since January 2019 MGBs yields are slightly trending down. With yields dropping will EPF be able to continue to pay high dividends without increasing their equity exposure ?

·      EPF with the economy gradually recovering  is a huge force in the market. They along with other institutions will provide strong equity support in 2019.  In addition if they repatriate overseas funds back to Malaysia that will give additional boost. EPF invested heavily in Europe and the US. Will they sell these overvalued developed markets and buy undervalued Asian markets?  

If this makes sense to you and you wish to add to your existing EPF/cash accounts, please contact me. I will share with you my asset allocation model.

The time seems right.

Invest well and grow your wealth,
Bill

Critter of the week is the national animal of Bhutan, the Takin. A friend of mine just returned from holiday to Bhutan and said they are the happiest people in the world. They are laid back and very friendly.