Weekly Market Update - 18 January 2016

Market Outlook

Equity Market Outlook

• Market sentiment continues to be weak due to a confluence of factors such as Fed rate hike, China slowdown and plunging oil prices.
• We maintain our bottom-up stock picking strategy. We prefer export-oriented stocks and selected big cap stocks.

Fixed Income Outlook 

• The Malaysian Government Securities (MGS) sovereign curve traded into strength, with yields falling across the curve. Short end benchmarks fell the most on strong foreign demand due to maturing short term bills.
• Last week, Moody’s downgraded Malaysia’s rating outlook from positive to stable on growth deterioration and external pressures. Elsewhere within the region, Bank of Korea maintained its policy rate but revised for a lower forecast on its growth and inflation whilst Bank of Indonesia slashed its policy rate by 25 bps to boost growth in spite of its weakening currency.
• This week, focus will be on Bank Negara’s monetary policy meeting. We expect policy rate to remain stable although the tone should turn cautious on downside growth risk.

Source: Lipper for Investment Management, as at 15 January 2016. Past performance is not necessarily indicative of future performance. 
 

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