Weekly Market Update - 19 October 2015

Market Outlook

Equity Market Outlook

• We do not expect any developments in the upcoming budget that will have a material impact on the market.
• There might be more cash handouts for the poor in the budget.
• We maintain our positive outlook for the Malaysia market and; our bottom up stock picking strategy.

Fixed Income Outlook 

• Over the past week, the market readjusted its rate hike expectations due to a poorer growth outlook and persistent low US inflation. As a result, emerging markets assets were supported, in particular the currencies. However, towards the end of the week, the currencies gave up most of the gains. On regional central bank actions, the central bank of Korea and Indonesia held their respective rates but the Monetary Authority of Singapore eased its policy by reducing the gradient of its currency appreciation bandwidth.
• The Malaysia Government Securities (MGS) market rallied last week, with short end curve gaining between 3-4 bps. Investors were seen rolling over their October maturities into short term benchmarks. There are a couple of events to look forward to this week, namely the Budget 2016, the Consumer Price Index (CPI), foreign reserves data and the European Central Bank (ECB) monetary policy meeting.

Source: Lipper for Investment Management, as at 16 October 2015
 

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