Wednesday, January 26, 2011

Deustche Bank Report Featured on Edge

It's gonna be a, Bull market! (work with me on this, will yer?)

So Deustche Bank says it's going to be a BULL MARKET in Malaysia this year. Its pretty optimistic with Malaysia's outlook given the Megaprojects, IPOs (think Petronas Chemicals) and subsidies being cut for financial austerity. Also cites increased consumer confidence and increase in M&A activity as reasons. Read it here:

Pinpoints financials, O&G, Plantations and Property as sectors they like. Read there for some definite picks they like. I'm no way endorsing what they pick and you know me, I'm not very excited with momentum investing. Long-term winners for me, please!

One portion which caught my eye was this:

"Recently, FTSE upgraded Malaysia from secondary emerging to advanced emerging status, placing the market in the same category as Taiwan. The change will be effective June 2011. Victor Phua, from our derivative strategy team, tells us that the upgrade in status will likely induce an additional US$392 million of equity inflow into Malaysia from passive funds tracking the FTSE World index series (which covers developed and advanced emerging countries). He also believes that the positive investor sentiment generated from being recognised as an advanced emerging market can be a catalyst for the equity market. In the two previous country upgrades (Hungary and Poland), the domestic market outperformed the regional benchmark by as much as 27.1% in the three months going into the effective date in September 2008, and further extended the gains by an average of 13.4% in the month after."

What this means is big caps/Blue chips in Malaysia will gain slightly from passive funds buying them up to reflect their exposure to Malaysia. So, it's quite a certain thing that blue chips will go up as demand goes up when June 2011 comes. The only question now is whether these stocks have priced this in yet?

I can't tell for sure. But if you're holding onto Telco or Financial stocks, you should be rubbing your hands with glee as passive funds usually build their exposure around such stocks.

No comments:

Post a Comment