Weekly Market Update - 15 June 2015

Market Outlook

Equity Market Outlook

• Last week was another lacklustre week for FBM-KLCI and the regional markets. Foreign and domestic funds have been seen trimming their exposure on stocks that have outperformed the index.
•  Weak Asian currencies against the USD were another reason for foreign selling.
• After the stronger than expected non-farm payroll job numbers, market is now pricing-in the expected interest rate hike in September. This has fuelled the profit-taking in the regional markets.
• We expect the local and the regional market to be range-bound till month end.
• We maintain our current strategy for all of the funds. 

Fixed Income Outlook 

• Last week, the Malaysian Government Securities (MGS) market traded weaker after the release of better US employment data. Market sentiment took a beating on fears of a hike in US rates would cause funds to flow out of emerging markets. Over the week, bonds traded 3-11 basis points of which the 7 and 10-year benchmarks suffered the most. There was little support as most investors preferred to remain cautious ahead of a potential Federal Reserve (FED) rate hike announcement.
• The week also saw both Moody’s and Standard & Poor’s affirming their respective ratings for Malaysia’s sovereign rating. Fitch Ratings indicated that they are more likely than not to downgrade the sovereign rating. The agency expects to conduct a full review on Malaysia’s ratings before the end of July.

Source: Lipper for Investment Management, as at 15 June 2015
 

DISCLAIMER: This publication shall not be copied, or relied upon by any person for whatever purpose. The information herein is given on a general basis without obligation and is strictly for information only. This publication is not an offer, solicitation, recommendation or advice to buy or sell any investment product, including any collective investment schemes or shares of companies mentioned within. Although every reasonable care has been taken to ensure the accuracy and objectivity of the information contained in this publication, Hong Leong Asset Management Bhd and its employees cannot be held liable for any errors, inaccuracies and/or omissions, howsoever caused, or for any decision or action taken based on views expressed or information in this publication. The information contained in this publication, including any data, projections and underlying assumptions are based upon certain assumptions, management forecasts and analysis of information available as at the date of this document and reflects prevailing conditions and our views as of the date of the document, all of which are accordingly subject to change at any time without notice. Hong Leong Asset Management Bhd does not warrant the accuracy, adequacy, timeliness or completeness of the information herein for any particular purpose, and expressly disclaims liability for any errors, inaccuracies or omissions. Any opinions, projections and other forward-looking statements regarding future events or performance of, including but not limited to, countries, markets or companies are not necessarily indicative of, and may differ from actual events or results. Nothing in this publication constitutes accounting, legal, regulatory, tax or other advice. The information herein has no regard to the specific objectives, financial situation and particular needs of any specific person. You may wish to seek advice from a professional or an independent financial adviser about the issues discussed herein or before investing in any investment products.