Disclaimer: This research should be used purely for informational purposes and is my own personal opinion. I bear no responsibility to whatever investment decisions taken by anyone with regards to this research.

Market Performance: KLCI is unchanged while most global markets were down

• The Kuala Lumpur Composite Index (KLCI) today was unchanged at 1,575 points, as investors paused ahead of the FED’s deliberations this week.
• Markets were mostly down, with the Philippines and Indonesia market declining significantly today. In the west, both the United States and German markets declined.

• The Philippines market was down due to the central bank considering pausing its easing program, downgrade of economic growth by the World Bank and possible fall in remittances. 

• The Indonesian market was down as Covid-19 cases spikes, World Bank projects no growth for the Indonesia, and allegations of unfair trade practices.

Market Outlook: Markets await the FED discussions this week, but sentiments turned negative on Covid-19 and political tensions.

• Global markets are awaiting the FED discussions this week, as it will decide the course for the global economy.
  Investors await the first Covid-19 forecast for the economy and interest rates. To recap, the FED held off in announcing a forecast in March, as the pandemic started to take hold of the US economy. Markets expect the FED to maintain its dovish stance of easing the US economy.
• Covid-19 starts to re-emerge, with OECD warning of dire economic impact to the global economy.
  News of Covid-19 cases are re-emerging in the United States and Hong Kong. Cases are rising again in California and has been linked to loosened restriction. In Hong Kong, after registering no cases for a certain period of time, cases are rising again in the city state. The OECD projects a decline of 6.0% to 7.6% for global growth in 2020.

• Political tensions between the United States and China escalated with Trump wanting to delist Chinese companies in US markets.
  The US Senate passed a bill that could ban many Chinese companies from listing in the US markets. The bill requires companies to be not owned or controlled by a foreign government. This is negative for Chinese companies as the line between politics and business is blurred in China. 

Portfolio Performance: Portfolio returns moderated, but remained higher than KLCI returns

• To date, portfolio returns moderated to 17.0% return (9 Jun 2020: 17.5%), outperforming the KLCI index at 15.0%. 
• This indicates an alpha of +2.0% for today (9 Jun 2020: +2.5%). (Note: Alpha is a measure of how much higher or lower the portfolio performs against the market. A positive alpha indicates that the portfolio outperforms the market and vice versa).

• From a sectoral viewpoint, Automotive sector continues to outperform the other sectors in the portfolio, but has moderated slightly.
• This comes at the back of profit taking from investors on the bullish run of automotive companies yesterday.

• To date, Lotte Chemical Titan (+78.8%), Cahya Mata Sarawak (+40.8%) and Bermaz Auto (+36.2%) are the highest returning stocks. You can have a look at the companies I am keeping track on in the Google Excel sheet here or the table below.