Weekly Market Review

  • Global & Regional Equities

    US equities gained ground bolstered by a softer inflation print and dovish comments from US Federal Reserve (Fed) members. The S&P 500 index edged up by 0.80% last week. Notably, the small-cap space outperformed, rising by 3.00% as a decline in bond yields helped reverse earlier losses.

    The US core personal consumption expenditures (PCE) price index, which is the Fed’s preferred inflation gauge came in line with expectations, rising 0.20% for the month and 3.50% on a y-o-y basis. While it hasn't yet reached the Fed's 2% inflation target, there is an overall downward trend.

    This was reflected in a shift of Fed members taking a more dovish stance, as various members expressed concerns on the impact of rising rates to consumers and corporates. Similarly, Fed Chair Jerome Powell struck a dovish tone at a recent conference, where he acknowledged that tighter US monetary policy was slowing down the economy.

    While he stated that it is premature to discuss rate cuts, he adds that current rates are “well into restrictive territory” and that the balance of risks between overtightening or hiking enough to control inflation appearing “more balanced”.

    The dovish remarks coincided with the US reporting a contraction in manufacturing, as the ISM manufacturing Purchasing Managers' Index (PMI) remained unchanged at 46.79 last month. This marks the 13th consecutive month that the PMI has stayed below 50.

    Treasury yields declined amidst rising expectations that the Fed has approached the end of its rate hike cycle. The US 10-Year Treasury yield fell 20 bps to close at 4.20% last week.

    US equities gained ground bolstered by a softer inflation print and dovish comments from US Federal Reserve (Fed) members. The S&P 500 index edged up by 0.80% last week. Notably, the small-cap space outperformed, rising by 3.00% as a decline in bond yields helped reverse earlier losses.

    In Asia, the broader MSCI Asia ex-Japan index experienced a marginal decline of -0.30%, revealing divergent performances across the region. Hong Kong's Hang Seng index took a substantial hit, plummeting by 4.20% on the back of a disappointing earnings report card. On the flip side, Taiwan's Stock Exchange Weighted index and India's S&P BSE Sensex stayed resilient, rising by 0.90% and 2.30%, respectively.

    Tech giants Alibaba and Meituan’s guidance fell short of expectations. This led to a cut in earnings forecasts, as both companies flagged concerns of a slower recovery in the coming quarters due to macro headwinds.

    Additionally, China's factory activity witnessed a second consecutive month of contraction as reflected in the official manufacturing PMI dropping to 49.4 in November from 49.5 last month. The weakness extends to the monthly property sales data which remains weak. This could signal to policymakers of the need for more muscular policy support to shore up economic growth.

    On portfolio action, we initiated a new position in US payment technology provider, FLEETCOR Inc. which has enjoyed steady earnings growth of up to 10%. Cash levels range between 5%-6%.

  • Updates on Malaysia

    On the local front, the benchmark KLCI closed flat at 0.20% as investors took cues from the 3Q’2023 results season which concluded last week. Overall, earnings performance aligned closely with estimates. Notably, domestic-driven sectors such as banks, consumers, property, and construction were seen outperforming. On the flipside, sectors such as technology and manufacturing which are more export-oriented delivered softer results.

    The latest semi-annual review of the KLCI resulted in changes to its composition. YTL Power International Bhd and its parent company YTL Corp Bhd are set to be included in the index, taking the places of Dialog Group Bhd and Westports Holdings Bhd. These adjustments are slated to become effective on December 18.

    In corporate headlines, Axiata concluded the sale of its 80% stake in Ncell Axiata Bhd, effectively exiting the Nepal market. In our view, this is a strategic move towards asset monetisation and helps remove a key overhang for the stock.

    We continue to add to our existing position in Axiata as a deep-value pick for our local portfolios. Additionally, we top-sliced our exposure in gloves to take some profit. Cash levels remain in the range of 10% to 20%.

  • Fixed Income Updates & Positioning

    Asian credits were stable last week for both the investment grade (IG) and high yield (HY) space. There was some profit taking action towards the end of the week after multiple weeks of rally. IG credit spreads ended 2 bps higher at 109 bps whilst HY saw spreads widening to 818 bps.

    Emerging market (EM) bonds saw outflows of USD 317 million last week compared to an inflow of USD 193 million the week before.

    In the Chinese property space, things are still looking grim due to negative property headlines and data showing weak property sales. Bond prices were as much as 6 points weaker. Some negative headlines include November property sales data down 3% m-o-m and 30% y-o-y and Powerlong defaulting on one of its coupon payments for its USD bond due 2025. We also saw China Vanke being downgraded 2 notches by Moody’s to Baa3 and its offshore bonds are now HY at Ba1/Negative. As a result, China Vanke's curve saw more volatility with bond prices down as much as 8 points.

    Elsewhere, there were some debt restructuring headlines with Shimao coming out with a new restructuring proposal for its offshore debts, looking for a haircut of about 50%. This was good news compared to market expectations of a haircut of about 70% - 80%. Also, China Evergrande will go to court on Monday, 4 December 2023, for its last adjournment on its debt restructuring.

    In Hong Kong, New World Development announced a bond tender last week. The tender offer is capped at USD 600 million. Both perpetual and bullet bonds gradually trended higher after the news but retreated back to pre-tender announcement prices towards end of the week.

    On portfolio action, we took profit on newly issued bonds like the Barclays 9.625% AT1, Fukoku 6.8% AT1.

    Back home, the local bond market was supported by local demands with some sporadic foreign balancing inflow towards the month-end. On a w-o-w basis, bond yields declined by 3 - 4 bps. The 10-year Malaysian Government Securities (MGS) closed at 3.82% whilst the 30-year MGS closed at 4.3%.

    There was a 7-year GII auction last week that saw a strong bid-to-cover ratio of 3.3x with an auction size of RM5 billion. The strong buying demand is likely due to the reinvestment of the recent RM11.5 billion GII maturity on 30 November 2023. The yield was also relatively flat compared to the 10-year GII.

    On corporate bonds, we continue to see buying demands, especially on the long-dated AAA names. The yield for the long-dated AAA names continues to decline by 3 - 5 bps with slower buying momentum comparing to the week before.

    On portfolio action, we continue to trade both government and corporate bond in the secondary market. We are strategically switching position whilst continue to take profit. On average, duration for our local FI funds are between 5 - 6 years with cash levels at 5% - 10%.

This content has been prepared by AHAM Asset Management Berhad (hereinafter referred to as “AHAM Capital”) specific for its use, a specific target audience, and for discussion purposes only. All information contained within this presentation belongs to AHAM Capital and may not be copied, distributed or otherwise disseminated in whole or in part without written consent of AHAM Capital.

The information contained in this presentation may include, but is not limited to opinions, analysis, forecasts, projections and expectations (collectively referred to as “Opinions”). Such information has been obtained from various sources including those in the public domain, are merely expressions of belief. Although this presentation has been prepared on the basis of information and/or Opinions that are believed to be correct at the time the presentation was prepared, AHAM Capital makes no expressed or implied warranty as to the accuracy and completeness of any such information and/or Opinions.
As with any forms of financial products, the financial product mentioned herein (if any) carries with it various risks. Although attempts have been made to disclose all possible risks involved, the financial product may still be subject to inherent risk that may arise beyond our reasonable contemplation. The financial product may be wholly unsuited for you, if you are adverse to the risk arising out of and/ or in connection with the financial product.

AHAM Capital is not acting as an advisor or agent to any person to whom this presentation is directed. Such persons must make their own independent assessments of the contents of this presentation, should not treat such content as advice relating to legal, accounting, taxation or investment matters and should consult their own advisers.

AHAM Capital and its affiliates may act as a principal and agent in any transaction contemplated by this presentation, or any other transaction connected with any such transaction, and may as a result earn brokerage, commission or other income. Nothing in this presentation is intended to be, or should be construed as an offer to buy or sell, or invitation to subscribe for, any securities.

Neither AHAM Capital nor any of its directors, employees or representatives are to have any liability (including liability to any person by reason of negligence or negligent misstatement) from any statement, opinion, information or matter (expressed or implied) arising out of, contained in or derived from or any omission from this presentation, except liability under statute that cannot be excluded.
Hello, I'm Nadia. How may I help you?
Talk to Nadia
Not sure what to ask? Try these.
  1. I forgot my i-Access password.
  2. How to perform redemption?
  3. What is the minimum amount to open an investment account?
  4. Checklist for deceased redemption.
  5. What is the best fund for me?
<  Slide to cancel
I'm listening ...
Click to stop recording

Managing Director
Teng Chee Wai is the founder of Affin Hwang Asset Management Berhad (Affin Hwang AM). Over the past decade, he has built the Company to be the fastest growing and only independent investment management house in Malaysia’s top three, with an excess of RM47 billion in assets under management as at 31 December 2018.​

​In his capacity as Managing Director / Executive Director, Teng manages the overall business and strategic direction as well as the management of the investment team. His hands-on approach sees him actively involved in investments, product development and marketing. Teng’s critical leadership and regular participation in reviewing and assessing strategies and performance has been pivotal in allowing the Company to successfully navigate the economically turbulent decade.

Teng’s investment management experience spans more than 20 years, and his key area of expertise is in managing absolute return mandates for insurance assets and investment-linked funds in both Singapore and Malaysia. Prior to his current appointments, he was the Assistant General Manager (Investment) of Overseas Assurance Corporation (OAC) and was responsible for the investment function of the Group Overseas Assurance Corporation Ltd.​

​Teng began his career in the financial industry as an Investment Manager with NTUC Income, Singapore. He is a Bachelor of Science graduate from the National University of Singapore and has a Post-Graduate Diploma in Actuarial Studies from City University in London.
Generic Popup