Market Review

 5 June 2021

Dear Fellow Investor,

Below is the weekly chart of EWM, an ETF which represents a basket of blue chip KLSE shares traded on the NYSE.

EWM, traded on NYSE  

This shows continued consolidation on relatively low volume since January 2021 holding support at the 50 week moving average. Despite the extreme pessimism and gloom among our local retail investors this ETF reflects foreign investor’s neutral views about Malaysia. Dividend income from quality blue chip Malaysian shares represented by this ETF would show a long term uptrend. Dividends in well managed solid companies are relatively stable and based on long term earnings trends compared to daily price fluctuations which move by  emotions and sentiment.

Sentiment has been negatively effected by MCO 3 and financial problems with Serba Dinamik . Compared to panic selling and big price drops in March with MCO 1, the bad news seems well absorbed. Infection rates are dropping and vaccines are being widely distributed.   Private clinics and hospitals have been given the green light to administer vaccinations. The same is happening in Singapore and this should help our recovery stocks including SATS, OCBC Carlsburg and Comfort del Gro.  

On Friday monthly US employment numbers were released showing less than expected hiring.  Stocks, gold and commodities rose while interest rates and the USD dropped  Despite inflation fears is means business as usual by the federal reserve- more money printing and QE.

 

Weekly US 10 year Treasury bond reflecting interest rate stability.

Take care
Bill

Why I am  bullish the RSX, the Russian ETF heavily weighted to Russian oil companies.