Dear Fellow Investor,
On Friday, Budget 2020 was announced.
Market reaction was muted. The KLSE was up marginally and the EWM which is the Malaysian country fund traded on the NYSE was also up marginally.
Weekly EWM the Malaysian country fund ETF traded on the NYSE reflecting the Friday close in New York. This ETF consists of KLSE index linked heavy weight shares.
If the budget was positive EWM would have risen strongly.
It would have meant foreign fund and professional buying to front run Monday’s KLSE open
Notice price trades below the 50 week moving average. This is evidence of a KLSE index linked downtrend.
The CIO of Phillip Capital Mgt posted a strategy report last week and mentioned the KLSE has been down 4 out of the last 5 years and is currently trading at the 1998 level of around 1500.
Not all is bad news: Many export related stocks are doing well because of the weakened Ringitt Some technology stocks are also outperforming Some high quality businesses are trading at extreme undervalued value levels. These are companies with growing earnings, dividends and consistent cash flow.
Our CEO says by focusing on these we can beat the index and at some point the market will recognize the value.
I attended a seminar today given by the 5th person, an Asian research group. They made a good case for beaten down Malaysian Hong Kong and Singapore value shares. They stressed value + dividends to help ride out the volatility. They expect the current world wide trend of lower interest rates to support these shares. They also like selected REITs.
Invest well and grow your wealth
Bill
Critter of the week is the world’s largest lizard a Komodo dragon living at the Singapore zoo. It would cost you a few thousand to visit Komodo island in Indonesia to see a Komodo dragon and in 2020 the island will be closed to visitors and once it reopens the visitor's permit will be 500 USD. I think I will choose the Singapore option.
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