Road to Investment

 11 Sept 2021

Dear Fellow Investor,

I would like to thank all of you who today attended our virtual 11^th annual Phillip Investor Conference, Road to Investment, Turning the Corner.  Hopefully next year will be in person. 

David Ng, a proprietary futures trader spoke about trading opportunities in commodities including CPO and metals. He feels with inflation increasing and the commodity cycle rising commodities should rise . He particularly likes copper and aluminium  due to increasing world demand for alternative energy and massive infrastructure spending by the US .  Inflation will benefit CPO as supply/ demand trends remain positive.

Yvonne  Tan of East spring gave her outlook on Malaysian equities. She reported that foreign funds are returning after having been out for the last 8 months. They are buying high quality blue chips and collecting 3.5 to 4 % dividend yields.  They are buying banks, energy, technology  and Telco's which are trading at attractive valuations.   Yvonne expects recovery in the 4^th quarter as Malaysia eases restrictions and more businesses get back to normal.

Yeu Huan Lai of Nikko Securities gave a briefing on Singapore. He presented the case for a rise in the STI to 3605 by 1st quarter 2022. This is based on Singapore getting the pandemic under control. Presently over 80 % of the population has been fully vaccinated.   More reopening will occur. GDP has reached pre pandemic levels. Growth is high in electronics, exports and manufacturing. The pillars of political stability, ease of doing business, and a talented workforce continues to attract  foreign investors including major tech companies such as Apple, Google and Tencent.  Market PE is 14 which offers value, earnings growth and rising dividend yields.   He likes banks, REITS, logistics and transportation related shares for recovery.  He likes mall Reits which can raise their rents as customer traffic picks up.

Edwin Lee of UOB gave his China outlook. He reviewed the new focus by the government on common prosperity.  He reported that China was since 1980 able to decrease the poverty level from 90 % to  less than 5 % in 40 years by introducing free markets and capitalism .  The result has been an explosion of business and wealth creation. Today 50 % of the wealth is controlled by less than 1% of the population so Chairman Xi wishes to level the playing field by introducing labor rights, more affordable housing and free education.  Lee said we need to focus on businesses the government favors such as alternative energy, electric cars and semiconductors. Our holdings in Kellington which is a Malaysian company that supplies industrial gasses to  China semiconductor companies is doing well.

Our CIO, Mr Ang Kok Heng gave a briefing on forces effecting market movements including insider buying and selling, corporate exercises, and foreign buying. He feels recovery is on the horizon as vaccine rollouts increase, political stability seems to be happening and foreigners return. He feels there is good value in selected shares.

Take care

Bill

Thank God, most of Asia and Malaysia and Singapore are not taking in unvetted Afghan refugees.