Weekly Market Update - 18 May 2015

Market Outlook

Equity Market Outlook

• Market is expected to be volatile during the current earnings reporting season.
• Regional outlook is positive as recent economic data from the US and Europe points toward a steady recovery.
• We expect the positive economic outlook in the region to eventually flow through to Malaysia.
• We maintain our bottom-up stock picking strategy for Malaysian equities.

Fixed Income Outlook 

• For the week ended 15 May 2015, following the sell-off trend in global bond markets, local govvies continued to experience some sell-off along the curves i.e. +1 bps to +3 bps w-o-w change, with the exception of the benchmark 5-, 7- and 10-year Malaysian Government Securities (MGS) i.e. -2 bps to -3 bps  w-o-w change. The 5-year MGS yield held steady mainly due to the strong support on the bond by foreign investors. The week also saw the new issue of 3-year Government Investment Issue (GII) ‘05/18 which garnered a strong bid-to-cover ratio of 2.6 times at an average yield of 3.508%. The week ended with the 3-, 5-, 7-, 10-, 15-, 20- and 30-year benchmark MGS yields settled at a respective 3.36%, 3.60%, 3.78%, 3.88%, 4.12%, 4.20% and 4.65%.
• The secondary Private Debt Securities (PDS) market saw lower active trading this week compared to last week. Average daily trading volume for the week stood at RM575 million compared to last week’s average of RM967 million, of which 57% of the trading volume was contributed by the GG/AAA segment and the remainder 43% by the AA segment.

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

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