Market Outlook
Equity Market Outlook
- Not much has changed since our last market outlook update. We expect the local market to remain volatile in view of current oil price levels.
- Recent reports indicated that the number of oil rigs have been reduced to multi-year lows, suggesting that oil price may have bottomed. Recent oil prices have stabilized, but visibility still remains poor.
- We maintain our stock-picking strategy for Malaysia. We favour high-yield stocks and export-oriented stocks.
Fixed Income Outlook
- The MGS market rallied 3-5bps across the curve last week, boosted by the stronger oil price and currency. Foreign investors were seen piling onto the long end of the curve, on lower global inflation expectations.
- Last week, the sovereign credibility received a boost when Moody’s reaffirmed Malaysia’s rating at A3/positive, driven by the government’s efforts to adhere to its fiscal deficit reduction and the country’s fundamental strengths to withstand a more adverse external economic environment.
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