Following the Fed committee’s view that inflation has no signs of overshooting above two percent, the market is now of the view that the gradual process of normalisation remains appropriate. This led to the easing of bond yields. In Singapore, the Singapore government 10-year bond yield has eased since peaking in May.
According to CIMB’s analysis, weak 2Q18 results season in Malaysia has led to the emergence of value-growth plays.
In Malaysia, weak 2Q18 corporate earnings in various sectors have forced investors to seek shelter in the large-cap space. As such, large caps have been outperforming mid-cap plays in Malaysia in the month of August. However, with diminishing buying opportunities, UOBKH believes that mid-cap plays are starting to become attractive, especially those with possible event catalysts. According to UOBKH, there are five mid-cap plays with improving the risk-to-reward ratio that investors can set sights on.
In the first part of this two-part series, we focused on RHB’s top 2H18 stock picks with a top down strategy. Apart from taking a top down approach of identifying key sectors that could outperform the broader market, RHB also assessed stocks on individual merits using a bottom up approach. In this article, we highlight two investment themes that derived from a bottom up strategy.
The consensus is becoming wary of weaker-than-expected GDP growth and slower EPS growth. RHB thinks that investors should readjust their portfolio to seek shelter in plays that will do well in a weaker economic environment. Using a top-down strategy, RHB identified two investment themes to help investors identify which stocks to look at.
The Kuala Lumpur Composite Index has mostly recovered from its year-to-date loss. Interestingly, KLCI has also outperformed all its ASEAN-5 peers year-to-date despite political uncertainty following Pakatan Harapan’s GE14 win. With the KLCI now trading at 17.1 times FY18 price-to-earnings (P/E), DBS advises investors to take caution and adopt a “Buy on Weakness” strategy given the external risks. Here are four Malaysian blue chips that DBS thinks investors should buy on price weakness.
Within the REIT sector, there are four resilient REITs that KGI recommends for investors looking to build a defensive portfolio when the current market sentiment is in the doldrums.
As fiscal gap concerns eased, Kuala Lumpur Composite Index staged a strong rebound since July to outperform regional indices. However, with global equity market now dampened by simmering trade tensions between the US and its major trading partners especially China, DBS recommends investors to be selective on MY stocks.
KGI recently released its investment strategy for the Singapore market in the next one year. Over the next 12 months, KGI recommends investors to sell into strength and start rebuilding into a defensive portfolio.
Defensive stocks pertain to those companies whose operations are not subjected by cyclicality. Here are three defensive stock picks are value plays with undemanding valuation.