Take a look at the report card for the Malaysian economy 1st half of this year.
If you refer to one of our previous write up on VIX, you find that we urge investors to buy when VIX is high! The article I’m talking about is here.
Still similar in plan, VIX is a good measure knowing that people are actually buying when the market dips. Furthermore, the current market scare comes from Trump playing fire with North Korea’s provocations. The severity is unknown and that is the reason why markets see it as a threat.
Markets do not like unknowns and the retracement opens up opportunity. Of course if a war break loose then markets would likely go sharp south first before heading up slowly just like in Operation Iraqi Liberation.
But for now, our bets are on everything returning to normal. That is the reason for a buy call on blue chips if your are the conservative type.
Strike the good small caps if you are the brave ones!
We agree with the recommendation for IHH but we still felt that this is the stock that isn’t worth buying when the price is consolidating. We prefer to buy IHH on dips during weak market times somewhat like today.
Valuation remains high for hospital operators but it is still a good business to invest in with REIT like exposure coupled with strong growth in the long term.
Take a look at Credit Suisse’s latest report on a summary of What Stocks have Foreigners Been Buying in Malaysia.
Biggest increase in foreign shareholding:-
1. Malaysian Airports, +13.7pp
2. Gamuda, +8pp
3. Maybank, +5.4pp
4. CIMB, +4.8pp
5. Sime Darby, +2.7pp
Reduced Foreign Holding:-
1. Air Asia, -9.6pp
2. Karex, -3.0pp
3. Tenaga, -2.4pp
4. IOI, -0.5pp
5. Telekom, -0.5pp
The outlook is still positive but we aren’t that optimistic towards this sector for 2H 2017. From the lack of new models and only the arrival of face-listed ones, we see that this segment still lacks catalyst for the time being.
Unlike Q4 of 2014 where most preferred brands such as Honda, Toyota and Perodua released multiple new models and big cuts to push out old models. It is hard for that period to come back which makes us ponder when should we buy undervalued automotive counters.
Firms are posting Mid Year Outlook and here is one from Blackrock. As usual, the recommendation is to keep your heads held high and look into higher equity markets with a stronger economic growth.