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 continued its decline in line with other markets in the world

• The Kuala Lumpur Composite Index (KLCI) today declined steeply by 3.1% to settle at 1,499 points. This marks the first time that the market has declined past its psychological support level of 1,500, erasing the gains from the first week of Jun 2020. 

• All markets were on a downward spiral with the exception of the United States as sentiments continue to sour over the second wave of Covid-19.

• Both the Philippines and Malaysian stock markets were the poorest performers today as they are hit by bad economic data coming out today also, in addition to the Covid-19 sentiments souring.

Market Outlook: Sentiments have deteriorated rapidly today as the scarcity of good news drove investors to be bearish.

• Sentiments around the world continued its decline today, as Covid-19 concerns around the world weighs on markets.
  Concerns of a further waves of Covid-19 reignited as the Chinese government implemented lockdowns in an area in Beijing, and banned tourism. In the United States, cases are starting to reemerge with the reopening of the economy, with Arkansas reporting a jump of 731 news cases since last Thursday.

• Domestic sentiments sour for the KLCI as latest unemployment rate is weakest since 1990.
  Unemployment rate declined to its lowest levels since 1990, registering 5.0% in Apr 2020. The number of unemployed persons increased sharply to 778k people and has been the highest in 40 years. This provides further support that the market may have been discounting the impact to jobs on the ground.

Source: DOSM

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

• To date, portfolio returns moderated to 9.7% return (12 Jun 2020: 13.5%), outperforming the KLCI index at 9.4%.

• This indicates an alpha of +0.3% for today (12 Jun 2020: +0.6%). (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 all sectors were down today.
  I am considering positions in the KLCI for newer stocks, as I view this as an opportunity to accumulate stocks at a lower price. Since this was a broad-based slowdown across all sectors, it makes it a bit easier to accumulate blue chip stocks.

• Note: You can have a look at the companies I am keeping track on in the Google Excel sheet here