Aboi's Updates For February 2015

KLSE TECH REVIEW

Here's the link for my last month's market sense: Aboi's Updates for January 2015

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

Recap - January's commentary. 
"As inflation goes up, Bank Negara will only have two real options. [1] sell foreign reserves to support MYR [2] raise interest rates." - On 28th Jan 2015, BNM has decided to maintain the OPR at 3.25%. Nevertheless the inflation impact of GST due in April is unknown (though for other countries inflation did went up when consumption tax was introduced in the following quarters).

"Because I do not believe that 2015 will be a good financial year for Malaysia I will spend more of my efforts to diversify globally and will need to do it anyway due to the need for portfolio rebalancing." - This still holds true. In fact research houses are expecting KLSE to only grow by 2-3% for 2015 and end between 1800 to 1850 points.

Apart from massive currency fluctuations around the globe (I will blog about this in a separate posting), the Malaysian market should be uneventful in February (along with CNY holidays). For the month of February, I will set the same resistance of 1800-1810 and revised the support line to 1760.

Key economic news and market update from AMP Capital's economic update (FoC, updated every Friday):
1. Oil bounced back a little, suggesting that $45 a barrel may be the baseline price for 2015.
2. European Central Bank (ECB) is embarking on its version of Quantitative Easing a.k.a print money. The Euro will weaken against other currencies, similar to the Yen when Bank of Japan (BoJ) did QE.
3. Greece far left party led by Syriza won election and now leads the government. Greece might face the possibility of an exit from the European Union. (though in my opinion this is not likely).

Portfolio - Healthy gains from funds and Supermx rebounded!
Just last month I mentioned that "Supermax was the hardest hit from rm2.35 to rm1.65 - backed by news that the CEO is charged for insider trading. Read more. Knee jerk reaction as Supermax is still business as usual." True to fundamentals I did not sell, it has recovered to positive territory at RM2.23. No need to panic if you did your homework well.

Gains were felt mostly from funds in January.
1. CIMB PRS Asia Pacific Ex Japan Equity: -0.45% to 7.97%
2. Aberdeen Islamic World Equity Fund: 3.53% to 7.40%
3. AmDynamic Bond Fund: 3.91% to 5.51%
4. Kenanga Growth Fund: 40.77% to 48.62%

I will continue to maintain and add position in no.1 as mentioned before. "Private Retirement Schemes in Malaysia Part 2. I plan to triple my current exposure inside this fund in 2015." Aberdeen will continue to do relatively decent backed by a growing US economy (it has no position in Oil & Gas counters which explains why it did not suffer when oil prices plunge). AmDynamic Bond with exposure in the Asia region (where yields are still good) will continue to perform in 2015. The opposite is for Kenanga, with 100% exposure to Malaysia it will attempt to drift along therefore I am only holding it (changed from BUY rating to HOLD).  

"The shining metal - gold is stubbornly holding ground near $1200, still slightly above my target price. Continue to monitor and wait." - Due to the lunar new year, demand for gold will be strong 'seasonally'. Overall commodities still have the downward long-term trend (remember that a US Fed rate hike sooner or later will make a stronger dollar). 

And finally the Dynaquest Stock Performance Guide Sept 2014 has arrived. Expect stock analysis soon which I will begin with YTLREIT.

PORTFOLIO REVIEW

Portfolio target composition. Equities 65%, Bonds 25% and Supplementary 10%.

Targets for returns p.a. Equities 12%, Bonds 5% and Supplementary 3.5%.

Notes
-SUPERMX - Interim Single-Tier Dividend 4%
-FREIGHT - Single Tier Final Dividend 3.5sen
-Changed Kenanga Growth Fund from a BUY rating to HOLD.
-Changed Aberdeen Islamic World Equity Fund from a HOLD rating to a BUY.

Comments
#1 Portfolio target for the fourth portfolio year @ RM140k for April 2014 has already EXCEEDED. Portfolio target for the fifth portfolio year @ RM152k for April 2015. The TWRR (time weighted annual return rate is now at 8.99% (up by 0.78% from Jan'15) vs my target of 9.40%).


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.