Daily Market Report (25 Oct 2019)
  • The recent concluded SCxSC 2019 Fintech conference has reinforced the digital agenda of Malaysia in embracing and facilitating the growth of fintech companies.
  • Budget 2020 has shown the government foresight in accelerating digitalisation of companies to head towards IR 4.0 as we move up the E&E value chain.
  • We believe interest in these sectors will continue to perform from the recent incentives announced in the Budget 2020. This will benefit technology related companies such as UWC, Dufu, Mi Technovation and Revenue.
Daily Market Report (24 Oct 2019)
  • Blue chips on the local bourse is underperforming to say the least. The FBM KLCI has declined 7.2% year to date dragged down mainly by banking stocks which were drastically sold down by foreign funds.
  • On the flipside, we are encouraged by the heightened trade velocity of the smaller cap companies during the same period as reflected by the almost 20% gain of the FBM Small Cap index YTD.
  • Dwelling further into the performance, both the Construction and Technology sectors are the saviours of market participation thus far with both indices saw 32.3% and 28.4% jump so far this year.
  • We believe liquidity would continue to flow into both sectors as companies within are anticipated to benefit from the recent incentives via Budget 2020. For Tech we favour names like Dufu, Datasonic, Mi Technovation, Greatech and Revenue.
Daily Market Report (23 Oct 2019)
  • It’s been almost 2 weeks since the tabling of Budget 2020 and we noticed that construction related contracts has been trickling in which we believe is a good sign.
  • Thus far contracts mentioned have totalled RM3.3bn for a plethora of smallish construction players namely TRC Synergy (RM99.5m), KKB Engineering (RM61m), Econpile (RM44m), Advancecon (RM50.5m), Vizione (pending RM2bn), Crest Builders (RM155m) and Vertice (RM851m).
  • Although the impact on the local bourse has been rather muted, we reckon going forward interests on these companies to gather momentum once more projects are announced as the hype on the construction sector is lifted again.

 

Daily Market Report (22 Oct 2019)
  • Debates whether banking stocks which had been on a mild free fall are ripe for pickings continue. Whilst we were also guilty of recommending the banks earlier, we did not envisage the severity of the sell-down particularly from the foreign funds.
  • Most of the big cap banks have had fallen by between 10-22% YTD which was unheard of before. Interestingly, only RHB and BIMB registered positive returns for the year possibly due to their lower foreign shareholding.
  • Reflecting the weak banking stocks, the Bursa Malaysia Finance Index declined 12% YTD. Looking at the prevailing scenario, maybe one should start to look at some banking stocks for such opportunity may not come too often.
  • Of the lot, Maybank, Public Bank, CIMB, Alliance and Hong Leong Bank seems a decent bet.
Daily Market Report (21 Oct 2019)
  • Gold has always been deemed as the preferred asset class amid high volatility between the equity and treasury markets. As a result, gold prices have had seen solid buying support with year to date gain of almost 16% to around US$1,500/oz which is a multi-year high.
  • Though the level is still way below the high of US1,900/oz during the gold rush in 2012, it nonetheless has been steadily creeping up over the past few months.
  • With market volatility not relenting anytime soon, we reckon there could be more upside for gold prices moving forward. Judging from the prevailing gold fever, we believe Bahvest which is producing gold in Tawau, Sabah should be in prime position to take advantage of the situation.