Volatile market

 9 April 2022

Dear Fellow Investor.

Malaysia and Singapore are diverging positively from most world stock markets. Reasons include opening of borders, decline in Covid and resumption of foot traffic to restaurants and malls. Malaysia is benefiting from high crude oil and palm oil prices which bring much needed revenue into the economy. Singapore shines because of their strong fiscal position, prudent spending and world class currency. Higher interest rates help the banks and financial institutions which dominate the SGX.   

In this period of increased volatility and uncertainty there has been a shift to value stocks and commodities. Value stocks such as selected high quality reits are in favor. A reit pays a steady predictable distribution and is a highly visible investment. You can see the property or properties, touch them and know if they are prospering. A few years ago, I attended a reit seminar in Singapore. The instructor said the way to judge management quality is to research their ROE or return on equity over a long time frame. If  is is gradually rising it means the management is doing a good job. A CEO can paint a rosy picture but the ROE tells the true story.  All the reits we hold for you pass the ROE test.

    Weekly CRB Index traded in New York represents  a basket of             leading world commodities. 

For the last 2 years the CRB has been in an uptrend.  Warren Buffet has been buying commodity related value shares for his Berkshire.B  fund and that is one reason his fund has done well this year. His shares in his Berkshire fund are mostly boring simple businesses which pay decent yields and are a good defense against inflation and higher interest rates.

Foreign funds continue to buy Malaysian and Singapore shares as valuations are reasonable and these markets have been out of favor for the last few years.  

Take care
Bill

Eagle feeding in Langkawi. Will soon be traveling to Langkawi for a short holiday. A friend recently returned and told me it was uncrowded and imported chocolate  is now available which they have a wide variety. Now there are many special prices on hotels and air flights