Opportunity is right in front of us.

 16 April 2022

Dear Fellow Investors,

Road to Recovery

The Singapore Malaysian borders are reopening after having been closed for 20 months since March of last year.  76 % of Malaysians have been vaccinated out of over 95 % of the population. and all but 2 states in the country have been classified in the final state of recovery.   
 

With the loosening of restrictions companies such as Heineiken on the last March earnings reported Q on Q a 40 % gain in core net profit and a 78 % gain in revenue which is evidence of easing movement restrictions.  Other quality consumer stocks such as Nestle and Ajinomoto  show improving results. Recovery is on the way and beginning to accelerate. The latest budget is supportive of consumer stocks.

Malaysian exports have had a good year. Exports have risen RM 1.2 trillion achieving 99% of 2025 target 4 years ahead of schedule.  Technology companies such as Inari should benefit in this space. 

The last 20 months have been challenging but our focus on high quality dividend paying companies has paid off.   

Malaysia is also the leading gateway to the Islamic economy surpassing even Saudi Arabia with a 48 % share of global sukuk issuance.

Maybank Islamic, a subsidiary of Maybank is the 4th largest islamic bank in the world in terms of assets held. Companies such as F & N are taking notice in the recent acquisition of the halal certified Sri Nona on the growth potential of halal certified foods.  Our investment in Maybank has finally broken even if we count the dividends. 

Plantations are also benefiting as our shares in United Plantations in last reporting showed great results with rising revenue, earnings and profit. They also declared a handsome dividend of 85 sen. The turmoil in Ukraine should continue to benefit plantation companies.   

Singapore is also in recovery as tourists return, restaurants fill up and shopping traffic improves. Despite the volatility in most world markets, Singapore and Malaysia are presently well supported but we must be very selective in our investment choices.  

Tong's column this week in the Edge explains very well how the investment landscape has changed. He details how rising interest rates, inflation, geopolitical turmoil and supply chain disruption will impact our investments.  He has downsized his US market investments, increased China exposure and maintained his Malaysia portfolio. 

Take care
Bill 

Opportunity is right in front of us.