Weekly Market Update - 28 November 2016

Market Outlook

Equity Market Outlook

• Foreign investors continue to sell the Malaysian equity market last week in view of expectations of more Fed rate hike next year.
• We maintain our view that the Malaysia equity market is seeing the tail-end of foreign selling activities.
• A cumulative foreign inflow is near the levels seen during the Great Financial Crisis.
• The funds are tactically positioned in export-oriented stocks and large cap stocks that have been sold down.

Fixed Income Outlook

•  The bond market was relatively quiet last week although yields continued its upward trajectory, especially the long benchmarks. The 3-year benchmark rose 14bps to 4.01% whilst the 10-year benchmark rose 53bps to 4.43%. However, local investors have started supporting the government bond market at current levels indicating market may bottom out.
• Bank Negara maintained its monetary policy rate in its final meeting of the year as widely expected last week. The central bank is likely to maintain its policy in the near term due to the ringgit weakness and to stem further capital outflow. Local headline inflation for October rose 1.4%, remaining relatively benign. The central bank projected inflation for the year may be at the lower end of the projected 2-2.5% range. 

Source: Lipper for Investment Management, as at 25 November 2016. Past performance is not necessarily indicative of future performance. 

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.