Aboi's Updates For May 2013 (GE special edition)

Here's the link for the previous month's market sense: Aboi's Updates for April 2013

For those who find it hard to follow I suggest reading through my previous posting on how I am using technical indicators as a trend seeker.

1. First Attempt on Tech Analysis Part 1
2. First Attempt on Tech Analysis Part 2

It was another AWESOME MONTH for Bursa and more importantly for my portfolio. First let's talk about Bursa. It ended the week with a high of 1711 points on the back of election fever and encouraging global news with better than expected job creation in the US and quick resolution Cyprus banking institutions. On my last posting I showcased another VSA testing on low volume which worked again and that some upside left lead to a 1711 point closure. Sad to say the feel good factor is GOING TO END. This coming week and likely for the rest of 2013 will a be TEST OF PATIENCE for many investors: retail and institutional. Having seen the political development over the last 2 weeks (not just mainstream media/alternative news portals/social media, I was on the ground too having attended 4 ceramahs and 3 so called "SAPU Malaysia" dinners, sorry I meant 1Msia). A summary of my thoughts by order of likelihood outcome of the coming 13th general election:-

Pakatan wins with majority of less than 10 seats:  1600-1800 (45%)
Pakatan wins with a majority of more than 10 seats: 1600-1850 (30%)

BN forms new govt but smaller majority than 2008:  1650-1750 (20%)
BN forms new govt with a bigger majority than 2008: 1650-1780 (5%)

Thus I am setting two support lines for two scenarios. Support line 2 at 1600 for knee-jerk reaction of a Pakatan win but with a more sustainable long term rally due to an expected better governance and less backdoor deals. Support line 1 at 1655 if BN retains their dominance and smaller rally because there is nothing NEW to be expected. Second my portfolio grew by another RM5000. This helped push my TWRR from 8.52% to 9.81%. As usual AMP Capital has good piece of information (freely available, no sign ups) on weekly global market & global economic update. It is usually updated every Sunday night so go read it when you have the time.

Portfolio composition. Equities 50%, Mixed Assets 15%, REITs 10%, Bonds 5% and Cash 20%.
Targets for returns p.a. Equities type 12%, Mixed Assets 8%, REITs 6%, Bonds 5% and Cash 3.75%.

Notes
*Income distribution of HwangDBS Select Income Fund 0.5 sen per unit

Comments
#1 No change to Aboi's rating thus far. 
#2 Bought 3200 units of Supermx shares at RM1.89 each as reflected on the table above.
#5 Portfolio target for third year @ RM128k for April 2013 and fourth year @ RM140k for April 2014. Third year target EXCEEDED!

Below here I dedicate a special feature just because of election. In the event that Pakatan forms the new govt (which is 75% likely) some sectors/industry will be scrutinized. The market should expect monopolies and concessions to come under review. I am NOT asking you to sell in a hurry but you at least OUGHT TO TAKE NOTE. There are likely 50+ GLCs in our Bursa which I cannot completely recall all of them. Just a list of major ones here:
TNB: As PR has plans to cut electricity tariffs. Stocks linked to our PM Najib: CIMB, PNB and Khazanah linked shares. Astro, DRB-Hicom, Maxis, MMC, Padiberas, Tradewinds, Gamuda, IJM, YTL and its related shares, Berjaya group of stocks and shares, FGV (Felda), Plus Expressways and all other listed highway related concessionaires. Construction related stocks will likely decline if Pakatan wins.

Good things to hold now (defensive stocks):
Consumer related stocks, REITs and some neutral banking stocks. I am also likely to hunt for good deals post GE13; Digi and a new bond fund. As you can see my portfolio consists of safe stocks/funds so there are no changes needed coming GE 13. Salam UBAH! Remember to cast your vote early (8.00 AM) on 5.5.2013!

Disclaimer: The reports, analysis and recommendations in this blog are solely my personal views. I do not link to any investment body or company. As such, I will not be responsible of any of your investment decision. Consult your investment adviser or come to your own conclusions before making any investment decision.