Weekly Market Update - 12 October 2015

Market Outlook

Equity Market Outlook        

• Malaysian market rebounded on positive trade data last week. The August export data grew for the 3^rd consecutive month and imports declined further. This resulted in a RM10.2 bn trade surplus – the biggest so far in 2015. The current weak Ringgit is an advantage for the export sector. Interest from foreign participants improved with net inflow of RM783.4 mn for the week, bringing month-to-date net inflow to RM580 mn. As such, we saw Ringgit rebounding from its weakest level at the end of September (RM4.457/ US$) to RM4.1295/ US$ last week. Last week’s rally was also likely led by news that Value Cap shareholders are set to release the 1st tranche of the RM20 bn fund in 2H of November.
• Our funds’ strategy remained same, stay overweight on export related sector and consumer sector.

Fixed Income Outlook

• The sovereign bond market rallied last week on dovish statements from the Fed and better local economic data. Bonds rallied between 1-6 bps with short end maturities gaining the most. Foreign investors were seen supporting the short end as some may have rolled over from bonds which are due to mature during the month.
• On a positive note, trade surplus for August rose to RM10.2 bn up from RM2.4 bn, with exports surprising to the upside whilst imports declined.

Source: Lipper for Investment Management, as at 9 October 2015


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