Opportunities for 2020

18 Jan 2020

Dear Fellow Investors,

Yesterday I had lunch with the head of research for Interpac Securities and he reviewed the opportunities for 2020.

These opportunities are the tech sector, plantations, and oil

The tech sector will benefit from the  45.9 billion of Foreign Direct Investment which is a 95 % rise from 2019 in this sector. Other sectors have seen an outflow of foreign funds.

According to Sam Cheong of UOB Bank the rise of the digital economy due to rapid technology advancements will contribute 20 % of the economy by 2021 up from 17.8 % in 2015. E Commerce will play a part. The digital free trade zone launched in 2017 will attract investments in e commerce and logistics. With the focus on global markets this will drive demand for Malaysian goods.

Our analyst, Angelina  is currently researching this sector and will be visiting 3 tech companies next week in Penang as possible buying opportunities . I will keep you posted once she finishes her project.

Plantations seasonally benefit this time of the year as demand picks up.  The lessening of trade tensions help. We currently hold United Plantations, which is arguably the most efficient planter in Malaysia.  The generous  well covered dividend supports the price.

Oil and gas should be well supported moving into 2020. Middle East uncertainty and the lessening of trade tensions aswell as  increasing demand from China/ India .  The booming US economy also supports demand. We are positioned  in Dialog, a well run and well managed integrated oil company .

With visit Malaysia 2020, our holding in Genting Malaysia should recover. Malaysia has loosened visa requirements for Chinese tourists who are the best customers. The FOX theme park should be launched by the 2^nd quarter which should attract more local visitors. The Genting Malaysia CEO bought 10 million shares for his own account near the bottom during the recent share price collapse Price has recovered almost 50 sen since he bought.

I always track insider buying as who would know more about a company than the CEO ?  You can find these transactions  reported on the Bursa website.

I also like selected REITs especially in Singapore, Hong Kong due to world growth slowing and low interest rates. We have exposure to  REITs via our PGWA accounts.

Critter of the week is an African elephant standing next to a baobab tree which can live over 1000 years.It is the world’s oldest tree. They store water so the elephant is there for a drink. Like all trees it does not grow to the sky- just like the stock market.