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Risk assets’ performance diverged significantly in November 2024, favouring the US markets, which gained on optimism about the economic growth outlook driven by potential expansionary policies from the incoming administration under President-elect Trump. Propelled by the US markets, the MSCI World Index increased by 4.47%. The Far East ex-Japan index underperformed, declining by 4.15%. Among the Far East ex-Japan markets, ASEAN equities fared relatively better (-2.22%). Singapore shares (+5.07%) were the top performers in November, while the laggards were the Philippines (-7.41%) and Indonesia (-6.07%). Regional currencies weakened against the USD. The best-performing currencies were the Vietnamese Dong (-0.26%), Philippine Peso (-0.86%), and Indonesian Rupiah (-0.94%), whereas the weaker ones included the Malaysian Ringgit (-1.53%) and Taiwan NT (-1.49%).

Major US indices rose as investors reacted positively to Trump’s election as the next US President. The strength of the USD and the high interest rate scenario for longer durations drove fund flows back into risk assets from fixed-income asset classes. The US economy remained resilient, with the Dow Jones Industrial Average (DJIA), S&P 500, and Nasdaq Composite Index gaining 7.54%, 5.73%, and 6.21%, respectively. The US composite Purchasing Managers’ Index (PMI) was firm at 54.9 in November, up from 54.1 in October, suggesting overall activity continued to expand. The manufacturing PMI improved to 49.7 from 48.5 a month earlier, although it still indicated contracting factory activity.

The Stoxx Europe 600 Index rose by 0.96%. In the eurozone, economic data continued to point to weakness, with the composite PMI falling to a 10-month low of 48.3, indicating contractions in both the services and manufacturing sectors. The euro area annual inflation rate rose to 2.3% in November 2024, up from 2.0% in October.

Hong Kong and H-share indices declined on profit-taking as the market reassessed the impact of economic support measures introduced in late September. The Hang Seng Index and Hang Seng China Enterprises Index corrected by 4.40% and 4.37%, respectively. Chinese A-shares gained by 0.66%. The 12th meeting of the Standing Committee of the 14th National People’s Congress concluded in Beijing, approving the “State Council’s Proposal on Increasing the Local Government Debt Limit to Swap Existing Implicit Debts” to raise the debt limit by RMB6 trillion to improve liquidity and spur economic activity. However, new RMB loans and social financing in October fell short of the same period last year, declining by 32% and 24% year-on-year, respectively, indicating weak business confidence.

South Korea’s KOSPI Index fell by 3.92%, weighed down by a correction in Samsung Electronics’ share price due to concerns over earnings prospects. The Bank of Korea’s monetary policy board trimmed the base rate by 25 basis points, reducing it to 3%. The industrial sector showed signs of recovery in October, with the index of all-industry production rising by 2.3% year-on-year. On a month-on-month basis, industrial production fell by 0.3% in October, extending the 0.3% decline in September.

Taiwan’s TWSE Index declined by 2.44% due to profit-taking. Taiwan’s index gauging the state of the economy flashed a “yellow-red” light in October, indicating a moderately hot economy, according to the National Development Council (NDC). The composite index of economic indicators dropped by two points to 32 in October, the lowest since April. Confidence in the real estate market fell to a four-year low in September, with the real estate market confidence index dropping by 4.28 points to 100.39, the lowest since August 2020. The consumer confidence index decreased by 1.57 points to 75.49.

Singapore’s STI rose by 5.07%, buoyed by resilient banking stocks. Singapore’s economy expanded by 4.1% year-on-year in the third quarter of 2024, accelerating from 2.9% growth in the second quarter. GDP growth was primarily driven by a 6.6% gain in goods-producing industries, with manufacturing and construction sectors rising by 7.5% and 3.1%, respectively.

Malaysia’s KLCI declined by 0.47%, reflecting continued profit-taking by foreign funds and Ringgit depreciation. At its November meeting, Bank Negara Malaysia (BNM) maintained the Overnight Policy Rate (OPR) at 3.00% for the ninth consecutive time, aligning with market expectations. Key domestic factors influencing this decision included modest inflation, averaging 1.8% year-to-date, and an upbeat economic growth outlook supported by resilient domestic expenditure, increased exports, and robust investment.

Thailand’s SET Index declined by 2.63% due to profit-taking. The annual core inflation rate, excluding food and energy, remained at 0.77%, the highest since August 2023. Overall annual inflation increased to 0.83% in October from 0.61% in September but was below the expected 0.94%.

The Jakarta Composite Index fell by 6.07%, driven by foreign fund profit-taking. Indonesia’s economy grew by 4.95% year-on-year in the third quarter of 2024, slightly below market estimates of 5.0% and marking the slowest GDP growth since the third quarter of 2023. The unemployment rate dropped to 4.91% in September 2024 from 5.32% a year earlier.

The Philippines PSE Index dropped by 7.41% due to profit-taking. The Philippine GDP grew by 5.2% year-on-year in the third quarter of 2024, down from a revised 6.4% growth in the previous quarter and below market forecasts of 5.7%. This marked the slowest growth since the second quarter of 2023, with moderations in government spending (5% vs 11.9%) and fixed investments (7.5% vs 9.7%).

Vietnam’s VN-Index declined by 1.11%. The annual inflation rate in Vietnam rose to 2.89% in October 2024 from 2.63% in September, driven by higher inflation in food and catering services (4.45% vs 3.94%) and family appliances and tools (1.33% vs 1.17%). Fixed direct investment pledges, an indicator of future disbursements, increased by 1.9% year-on-year to USD 27.26 billion.

he market optimism surrounding the election of Donald Trump as the new US President, driven by the potential reflation of the world’s largest economy, has sparked a recalibration of macroeconomic variables and asset allocation decisions. The outlook for interest rates has turned less dovish, and the USD has strengthened. However, uncertainty regarding the implementation of actual policies may create significant variances against expectations, leading to heightened trading volatility.

Resilient US economic data, prospects of US interest rate cuts, and better-than-expected corporate earnings reports have so far boosted investor sentiment, pushing the US stock market to new historical highs. This has occurred despite the market’s already elevated valuations and ongoing geopolitical tensions. Any adverse changes in the trajectory of US economic growth and their consequent effects on corporate earnings could have a significant impact on the market. Additionally, an escalation of geopolitical conflicts or intensification of military confrontations in the Middle East could have major adverse effects on global markets. It remains to be seen whether the incoming Trump Administration will act as a catalyst for ending the war in Ukraine or alter the dynamics of conflicts in the Middle East.

We are closely monitoring geopolitical developments and policy directions in major economies, particularly the US under the Trump Administration and China. US economic data, including labour market and inflation metrics, alongside interest rate policy responses, will significantly influence market sentiment and liquidity. In Asia, the focus remains on the pace of China’s economic recovery, which has been weaker than anticipated. The Chinese property sector continues to face severe challenges, and any signs of stabilisation and growth in this sector would serve as a positive catalyst for China’s economy and risk assets.

The Chinese government has introduced various measures to support the economy, including a series of monetary, fiscal, and policy initiatives announced in September to stimulate investment, enhance liquidity, and restore confidence in property and financial markets. While these measures have boosted market sentiment, their long-term effectiveness remains uncertain and will be closely monitored. It may take time for these initiatives to yield tangible results. Market observers anticipate additional stimulus measures may be introduced in the future.

Despite the easing of interest rates, headwinds persist for risk assets. These include the impact of still-high interest rates on business and economic activities, uncertainties surrounding US policies post-election, historically high market valuations in the US, ongoing geopolitical tensions in Europe, the Middle East, and East Asia, as well as slower-than-expected economic growth in China. Nevertheless, in the investment space, there remains room for cautious optimism. After years of prolonged sell-offs, the depressed valuations of Chinese equities present potential upside, particularly following the recent round of significant policy changes.

We continue to apply our strategy of focusing on identifying fundamentally healthy companies with low valuations, low leverage, high growth, robust management and a strong track record, and adherence to our investment philosophy of “Never Fully Invest at All Times” which has served us well over the years.

We thank you once again for your continued faith in us, and hope to remain good stewards in our endeavour to protect and grow your capital.

This article is solely for information purposes. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument, investment product or service. The information contained herein does not have any regard to the specific investment objectives, financial situation or particular needs of any person. Investors may wish to seek advice from a financial advisor before making any investment decision. Past performance is not indicative of future results. An investment is subject to investment risks, including the possible loss of the principal amount invested.

Dear Valued Investors,

This notice serves as an update to our earlier communication on 22 October 2024 regarding the SARCOMA Cyber Security Incident.

Pheim Unit Trusts Berhad (PUTB) experienced a cybersecurity breach that led to the unauthorised access and exposure of certain client data, including information related to some EPF investors. It has come to our attention that some personal data may be circulating online. The PUTB Incident Response Team is actively working to assess the situation and mitigate any risks. We are working closely with the relevant authorities to address this issue and ensure a swift resolution while maintaining the security and confidentiality of client information. Further updates will be provided as the investigation progresses. To safeguard the interests of our EPF investors, the EPF has temporarily suspended all EPF-Members’ Investment Scheme (EPF-MIS) approved funds effective 18 November 2024, until further notice.

Due to this suspension, no new sales or switch-ins will be accepted for our existing EPF-MIS funds and for new EPF-MIS. However, please be assured that the existing investments of all unit holders remain unaffected. Existing EPF-MIS may either retain their investments or opt for redemption. Meanwhile, all non-EPF members’ investments, as well as redemptions, will continue to be accepted and processed as usual upon booking.

For any further inquiries or concerns, please contact us at support@pheimunittrusts.com or call 03-2142 8888.

]]> https://pheimunittrusts.com/market-review-november-2024/ Tue, 12 Nov 2024 06:23:43 +0000 https://pheimunittrusts.com/?p=16636

Risk assets in major markets declined in October 2024, with concerns rising over potential inflation resurgence and a moderating growth outlook. Optimism for additional rate cuts similar on September’s was dampened. The Far East ex-Japan index underperformed against developed markets, with the MSCI Far East ex-Japan Index down 3.59%, compared to a 2.04% decline in the MSCI World Index. ASEAN equities underperformed, with a -5.43% return, though Indonesia’s market fared better at 0.61%. Taiwan led gains in the region, rising 2.68%, while the laggards were the Hang Seng Index (-3.86%) and Hang Seng China Enterprises Index (-3.27%). Regional currencies weakened against the USD, with the Taiwan NT (-1.12%), Chinese Yuan (-1.40%), and Singapore Dollar (-2.63%) performing best, while the Malaysian Ringgit (-5.81%) and Korean Won (-4.52%) underperformed.

US markets also fell as investors adjusted their rate expectations. Core inflation remained high in September at 3.3%, above expectations. Nonetheless, the US economy showed resilience, though the upcoming election kept some investors cautious. The Dow Jones, S&P 500, and Nasdaq dropped by 1.34%, 0.99%, and 0.52%, respectively. The US composite PMI held steady at 54.3 in October, while the manufacturing PMI improved to 48.5, indicating continued contraction in factory activity.

In Europe, the Stoxx Europe 600 Index declined 3.35%. The eurozone’s October inflation rose to 2.0% year-on-year, mainly due to energy base effects, up from 1.7% in September. The ECB announced its third 25 bp rate cut of the year, lowering the deposit rate to 3.25%, amidst signs of economic slowdown, particularly in manufacturing, while services showed strong demand.

Hong Kong and H-shares indices stabilized after initial enthusiasm over China’s economic support measures in late September. The Hang Seng and Hang Seng China Enterprises Index corrected 3.86% and 3.27%, respectively, while Chinese A shares declined 3.16%. China’s September exports totaled US$303.71 billion, rising 2.4% year-on-year, below market expectations of 6.0% due to weaker demand. China’s GDP grew 4.6% in Q3 FY2024, slightly exceeding expectations. The PBOC announced a “Securities, Funds and Insurance companies Swap Facility (SFISF)” with an initial RMB500 billion scale to support eligible financial firms, which lifted investor sentiment.

South Korea’s KOSPI Index dropped 1.43%, affected by a correction in Samsung Electronics on concerns over earnings. South Korea’s economic outlook weakened, with Q3 GDP up just 0.1% from the previous quarter as exports slowed. The central bank downgraded growth projections to around 2.2% for the year.

Taiwan’s TWSE Index gained 2.68%, supported by TSMC’s strong Q3 results and positive outlook. Taiwan’s GDP grew 3.97% year-on-year in 3QFY2024, down from 5.06% in Q2 but surpassing the expected 3.4% growth. September export orders reached US$53.79 billion, rising 7.1% month-on-month but down 3.5% when seasonally adjusted, and growing 4.6% year-on-year, below consensus estimates.

Singapore’s STI fell by 0.74%. The economy expanded 4.1% year-on-year in Q3, accelerating from 2.9% in Q2, led by a 6.6% increase in goods-producing industries, with manufacturing and construction up 7.5% and 3.1%, respectively.

Malaysia’s KLCI dropped 2.85% due to foreign fund profit-taking and Ringgit depreciation. The economy grew faster than expected in Q3 at 5.3% year-on-year, with gains in services and manufacturing, on track for the government’s revised growth forecast.

Thailand’s SET Index edged up 1.19%. The Bank of Thailand cut its key rate by 25 bps to 2.25% in October, its first cut since 2020, to address low inflation and weak economic conditions. Economic growth is forecasted at 2.7% in 2024, led by tourism and consumption, though challenges remain for exports and SMEs.

The Jakarta Composite Index rose 0.61% despite foreign profit-taking. Indonesia’s exports grew 6.44% year-on-year to USD 22.08 billion in September, though below market expectations of 8%. This marked the sixth consecutive month of export growth, driven by non-oil and gas exports.

The Philippines’ PSE Index fell 1.78% on profit-taking. The central bank cut its benchmark rate by 25 bps to 6%, marking a second consecutive cut, aligning with expectations.

Vietnam’s VN-Index declined 1.82%. Retail sales rose 7.6% year-on-year in September, marking the 34th month of growth, though at a slower pace than the previous month, impacted by Typhoon Yagi that happened in the early of this month. Domestic consumption continued to support the economy.

After many months of US Fed rate hikes since 2022 to curb inflation, the Fed finally cut rates by 50 basis points (bps) at its 18 September meeting. Markets were anticipating another possible cut by year-end. The Fed’s September rate cut has received a positive reaction from markets, although it was largely factored in earlier. Moving forward, the Fed’s rate decisions will likely be influenced by balancing inflation risks against economic data, particularly concerning the labour market.

The resilience of US economic data, prospects of further rate cuts, and better-than-expected corporate earnings have boosted investor sentiment, pushing the US stock market to new highs. However, with high market valuations and ongoing geopolitical tensions, any downturn in the US economy impacting corporate earnings could significantly affect the market. Escalating geopolitical conflicts, especially military tensions in the Middle East, could also pose major risks to markets.

We are closely monitoring geopolitical developments and major economies’ policy directions, especially from the US and China. The ongoing Israel-Hamas conflict raises concerns about further instability in the Middle East. In the US, economic, labour, inflation data, and interest rate policies will influence market sentiment and liquidity. Added uncertainties include the outcome of the US Presidential election between Donald Trump and Kamala Harris, which could lead to shifts in US economic and foreign policies.

In Asia, the focus is on China’s slower-than-expected economic recovery, particularly in the struggling property sector. Any signs of stabilization here would be a positive catalyst for China’s economy and risk assets. In September, the Chinese government introduced new monetary, fiscal, and policy measures aimed at boosting investment, liquidity, and confidence in property and financial markets. While these initiatives have improved market sentiment, their long-term impact remains to be seen, with market observers expecting further stimulus.

While interest rates are easing, headwinds for risk assets remain. These include the lingering impact of high rates on economic activity, uncertainties in US policies post-election, high valuations in the US, and ongoing geopolitical tensions in Europe, the Middle East, and East Asia, as well as China’s slower economic growth. However, we believe there is cautious optimism in our investment space. Following years of sell-offs, the low valuation of China equities offers potential upside, especially after recent policy changes.

We continue to apply our strategy of focusing on identifying fundamentally healthy companies with low valuations, low leverage, high growth, robust management and a strong track record, and adherence to our investment philosophy of “Never Fully Invest at All Times” which has served us well over the years.

We thank you once again for your continued faith in us, and hope to remain good stewards in our endeavour to protect and grow your capital.

This article is solely for information purposes. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument, investment product or service. The information contained herein does not have any regard to the specific investment objectives, financial situation or particular needs of any person. Investors may wish to seek advice from a financial advisor before making any investment decision. Past performance is not indicative of future results. An investment is subject to investment risks, including the possible loss of the principal amount invested.

Dear Valued Investors,

Kindly be informed that Pheim Unit Trusts Berhad (PUTB) was among many companies around the world that has been affected by the global SARCOMA data-theft attack, first detected in October 2024. SARCOMA group has claimed 36 victims worldwide in October 2024, and the dark web claims that the group has in possession of our clients’ sensitive data.

As the source of the dark web is unverified, we adopt the most prudent level of precaution, as the client data is our highest priority. As soon as we became aware of the breach, we took immediate action to disconnect the affected servers from the network, prioritize containment strategies and communicate with relevant stakeholders and the Securities Commission.

In the meantime, we have taken steps to prevent a similar incident from happening again. These include establishing an Incident Response Team consisting of Certified Cyber Security Specialists to instigate remedial actions which have strengthened the resiliency of our systems and network.

Meanwhile, we are working very closely with the Securities Commission, and have kept them up to date with the position as our investigation is still on-going.

To safeguard yourself, we recommend our clients to:

• Be cautious of any unsolicited communications e.g. phone calls, SMS and emails.
• Do not download attachments or click on any unverified links received via emails or SMS.
• Refrain from sharing passwords with anyone.

If you wish to have further clarification, please do not hesitate to call us at 03-2142 8888 or email us at support@pheimunittrusts.com.

Risk assets in major markets gained in September 2024, driven by easing monetary policies. The Far East ex-Japan Index outperformed developed markets. Led by Chinese shares, the MSCI Far East ex-Japan Index gained 10.06%, while the MSCI World Index rose by 1.69%. Among Far East ex-Japan markets, ASEAN equities underperformed with a return of 5.54%. China A shares (+20.97%) and China H shares (+18.62%) were the top performers, boosted by significant stimulus announcements. Meanwhile, Korea shares (-3.03%) and Indonesia shares (-1.86%) were the laggards. Regional currencies strengthened against the USD, with the Malaysian Ringgit (+6.29%), Indonesian Rupiah (+5.21%), and Thai Baht (+4.41%) leading the gains, while the Vietnamese Dong (+1.56%) and Chinese Yuan (+1.91%) also appreciated.

Major US indices saw positive performance, driven by improved sentiment after the Fed cut interest rates by 50 bps. The US economy remained resilient, with the Dow Jones Industrial Average (DJIA), S&P 500, and Nasdaq rising 1.85%, 2.02%, and 2.68%, respectively. The headline CPI continued to decline to 2.50% in August, meeting market expectations, while core CPI remained stable at 2.70%. The US composite PMI was firm at 54.0 in September, suggesting continued expansion, although the manufacturing PMI softened to 47.3, indicating slower factory activity.

In Europe, the Stoxx Europe 600 Index fell by 0.41%, as the eurozone’s Composite PMI remained in contraction at 48.9, with the economic outlook staying weak. The manufacturing PMI also dropped to 45.0 from 45.8 in August, reflecting slower activity.

Hong Kong’s Hang Seng Index and Hang Seng China Enterprises Index surged by 17.48% and 18.62%, respectively, following strong stimulus measures. Chinese A shares also rebounded sharply, gaining 20.97%. China’s external demand remained robust, with August exports up 9.0% Year-on-Year, exceeding expectations. A Politburo meeting chaired by President Xi stressed urgency in stabilising the economy, with efforts to boost the financial and property markets.

South Korea’s KOSPI Index dropped 3.03%, weighed down by Samsung Electronics’ stock decline on earnings concerns. The OECD cut South Korea’s 2024 growth forecast to 2.5%, but exports remained stable with a 2.2% forecast for next year.

Taiwan’s TWSE Index lagged, declining by 0.20% due to profit-taking. The weaker US dollar could impact Taiwan’s electronics revenue. However, Taiwan’s industrial production rose 12.3% Year-on-Year in July, driven by a 12.97% growth in manufacturing.

Singapore’s STI rose 4.13%, with non-oil domestic exports up 10.7% Year-on-Year in August, largely due to a 35.1% jump in electronics shipments. The Asian Development Bank upgraded Singapore’s GDP growth forecast to 2.6%, up from 2.4%.

Malaysia’s KLCI declined 1.78%, as domestic fund support weakened despite positive sentiment. Total trade grew 18.6% Year-on-Year in August, marking eight consecutive months of expansion, although the trade surplus narrowed to RM5.7 billion due to faster import growth.

Thailand’s SET Index gained 6.60%, driven by strong capital inflows and currency appreciation. Political stability reduced risks and attracted foreign investment. August exports grew 7.0% Year-on-Year, exceeding expectations, while imports increased 8.9%.

Jakarta’s Composite Index fell by 1.86% as foreign investors took profits. Bank Indonesia cut the BI-Rate by 25 bps to 6% ahead of the Fed’s rate cut, while inflation stood at 2.12% in August.

The Philippines PSE Index gained 5.44%, extending the 8.12% gain in August, as inflation continued to ease. September inflation was 1.9%, indicating potential for looser monetary policy. Foreign fund inflows year-to-date stood at USD 22 million.

Vietnam’s VN-Index rose by 0.32%, supported by credit growth of 7.38% by mid-September, led by private banks. The State Bank of Vietnam set a 15% credit growth target for 2024, while the Finance Ministry removed a prefunding requirement for foreign investors, boosting Vietnam’s chances of being upgraded to an Emerging Market classification.

After many months of rate hikes by the US Fed since 2022 to beat inflations, the Fed finally decided at its 18 September meeting to cut rates by 50 bps.  Balancing inflation risk against the risk of the labour market will influence the Fed’s rates moves going forward.  Market expectations are that there may be a further rate cut before the end of the year.  Markets have reacted positively to the Fed’s 50 bps rate cut in September, although much of it had been factored into the market.

So far, resilient US economic data and the prospect of US rate cuts have boosted investor sentiments and pushed the US stock market higher, breaching new historical high. Investors have been pricing in expectation of a lower interest rate environment as early as second half of 2024. This, coupled with corporate earnings reports that have so far been better than expected, has kept investment sentiment buoyant, despite the US market’s elevated valuation and continuing geo-political tensions. Any adverse change in the US economic growth trajectory and its consequent effect on corporate earnings would have significant impact on the market.  Escalation of geo-political conflicts, and expanding and intensification of military conflicts in the Middle East, could also have major adverse impact on the markets.

So far, resilient US economic data and the prospect of further rate cuts have boosted investor sentiment, pushing the US stock market to new historical highs. Investors are already pricing in expectations of a lower interest rate environment as early as the second half of 2024. Strong corporate earnings, which have exceeded expectations, are also supporting positive market sentiment, despite elevated valuations and ongoing geopolitical tensions. Any negative shift in US economic growth or corporate earnings could significantly impact the market. Escalation of geopolitical conflicts, especially in the Middle East, could also weigh heavily on global markets.

We are watchful of geo-political developments as well as policy directions in the major economies, in particular US and China.  The continuing Israel-Hamas conflict, and the risk that it may potentially spread in the Middle East, has added to the uncertainties. US economic, labour, inflation data, and interest rate decisions will influence market sentiment and liquidity. Adding to market uncertainties is the upcoming US Presidential election on 4 November, where the outcome, whether it’s Donald Trump or Kamala Harris, could lead to significant shifts in US economic and foreign policy.

In Asia, the focus is on China’s economic recovery, which has been slower than expected. The Chinese property sector continues to face severe challenges, and any signs of stabilisation would serve as a positive catalyst for China’s economy and risk assets. The Chinese government has introduced several measures to support the economy, including a series of monetary, fiscal, and policy initiatives in September aimed at stimulating investment, enhancing liquidity, and restoring confidence in the property and financial markets. While these actions have improved market sentiment, their long-term effectiveness remains uncertain and will be closely monitored. It may take time for these measures to show results.

Despite the headwinds for risk assets, such as high interest rates and their impact on businesses and economic activities, US market valuations remain high, and geopolitical tensions persist in Europe, the Middle East, and East Asia. Additionally, China’s economic growth is still below expectations. However, we remain cautiously optimistic. Following years of sell-offs, China’s depressed equity valuations offer potential upside, particularly with the recent wave of significant policy changes.

We continue to apply our strategy of focusing on identifying fundamentally healthy companies with low valuations, low leverage, high growth, robust management and a strong track record, and adherence to our investment philosophy of “Never Fully Invest at All Times” which has served us well over the years.

We thank you once again for your continued faith in us, and hope to remain good stewards in our endeavour to protect and grow your capital.

This article is solely for information purposes. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument, investment product or service. The information contained herein does not have any regard to the specific investment objectives, financial situation or particular needs of any person. Investors may wish to seek advice from a financial advisor before making any investment decision. Past performance is not indicative of future results. An investment is subject to investment risks, including the possible loss of the principal amount invested.

Risk assets in most markets moved higher in August 2024 despite a sharp sell down at the start of the month. The Far East ex-Japan index underperformed vis-a-vis the developed markets.  The MSCI Far East ex-Japan Index gained 2.01%, while the MSCI World Index gained 2.51%. Among the Far East ex-Japan markets, ASEAN equities performed well with a return of 6.82%. Appreciating currencies attracted fund flow into Asean markets. Indonesia shares (+5.72%) and Malaysia shares (+3.27%) were the top performers in August.  The laggards were China A shares (-3.51%) and Korea shares (-3.48%). Regional currencies were strong against the USD. The best performing currencies were Malaysia Ringgit (+6.29%), Indonesia Rupiah (+5.21%) and Thai Baht (+4.41%), while the weaker ones were Vietnamese Dong (+1.56%) and Chinese Yuan (+1.91%) though they still registered gains against the USD.

Major US indices performance was positive amidst a shift of investor focus to potential interest rate cut in coming months.  The US economy remained resilient. Dow Jones Industrial Average (DJIA), S&P 500 and Nasdaq were up 1.76%, 2.28% and 0.65% respectively. US core inflation remained at comfortable level of 2.6% Year-on-Year in July, but it is still above the Fed’s long-term target of 2%. The US composite Purchasing Managers’ Index (PMI) remained firm at 54.1 in August compared to 54.3 in July, suggesting overall activity continued to expand. However, US manufacturing PMI recovered to 47.2 from 46.6 a month ago, reflecting improving factory activity.

The Stoxx Europe 600 Index gained 1.33%. In the eurozone, the boost to the French service sector from the Olympics resulted in the eurozone composite PMI (Purchasing Managers’ Index) coming in higher than expected. However, the overall economic backdrop remained weak. The PMI strengthened in August to 51.0 versus 50.2 in July.

Hong Kong and H shares indices rebounded on improved sentiment over stimulus measures to boost domestic consumption. Hang Seng Index and Hang Seng China Enterprises Index returned +3.72% and +3.67% respectively whist A shares declined 3.51%. External demand remained healthy with export growth for July increasing by 7% Year-on-Year. China’s NDRC and The Ministry of Finance announced the allocation details of the Rmb300bn ultra-long-term special government bond, which included subsidies for both passenger vehicle (PV) and commercial vehicle (CV). PV trade-in subsidy doubled.

South Korea’s KOSPI Index declined 3.48%.  The Bank of Korea maintained its interest rate unchanged at 3.5% for the 13th consecutive session due to concerns over rising property prices. On fiscal policy, the government calls for greater fiscal policy roles in the face of weak domestic demand and longer-term growth momentum. The finance ministry proposed a 3.2% on-year increase in next year’s budget to 677.4 trillion won (US$509.71 billion). Last year, it proposed 2.8% budget growth for 2024.

Taiwan’s TWSE Index gained 0.31% on bargain hunting. Taiwan lowered its forecast for gross domestic product (GDP) growth in 2024 to 3.90%, citing a weaker-than-expected export performance. The Directorate General of Budget, Accounting and Statistics (DGBAS) lowered Taiwan’s GDP growth forecast for 2024 by 0.04 percentage points from the previous estimate of 3.94% made in May to 3.90%, while it anticipated economic growth in 2025 to hit 3.26%.

Singapore’s STI decline 0.38%. Singapore’s headline inflation in July 2024 stayed stable at 2.40% Year-on-Year, while core inflation eased to 2.50% Year-on-Year (June: 2.90%), both below Bloomberg consensus’ forecasts, due to lower inflation across all categories. Trade data remained strong with Singapore’s July 2024 NODX coming in above Bloomberg consensus, expanding by 15.7% Year-on-Year, (June: -8.80%).

Malaysia’s KLCI gained 3.27% on continued strong domestic fund support amid buoyant sentiment. The index gain was built on the 5.01% rise recorded in July.  Foreign investors added another RM 2.5bn flow as net buyers in August 2024, almost double the July 2024 net buy flows of RM1.3bn. The August 2024 net buy flows were the highest monthly net buy flows by foreign investors in 2024. The Malaysian economy advanced by 5.90% in the second quarter of 2024 (1QFY2024: 4.20%). The growth is driven by stronger domestic demand and further expansion in exports. Household spending increased amid sustained positive labour market conditions and larger policy support.

Thailand’s SET Index gained 2.89% on bargain hunting as political uncertainty eased following the election of Miss Paetongtarn Shinawatra as new prime minister on 16 Aug. Thailand’s GDP grew 2.30% in 2QFY2024, surpassing forecasts and improving from 1.60% in 1QFY2024. Growth was driven by stronger exports and modest import growth, while private consumption slowed. Government spending saw a slight increase after several periods of decline, and industrial output rebounded. The Bank of Thailand (BOT) kept its key interest rate at 2.50%, marking its fifth consecutive meeting without a change.

Jakarta Composite Index continued to gain momentum, adding 10.83% on foreign inflow. The gain was much better than the 3.18% recorded in July.  Indonesia’s economy grew by 5.05% Year-on-Year in the second quarter of 2024. On the production side, Accommodation and Food Service Activities experienced the highest growth at 10.17%. Meanwhile on the expenditure side, households’ consumption component experienced the highest growth at 9.98%.

The Philippines PSE Index gained 4.21%, extending the 3.40% gain in July. The second-quarter economic expansion was the fastest since the 6.40% annual growth in the first quarter of 2023, beating the 6.20% estimate in a Reuters poll of economists and outpacing the upwardly revised 5.80% growth in the first three months of the year. Consumer spending grew 4.60% in the period, accounting for two-thirds of output. Investments increased 11.50% while government spending expanded by 10.50%.

Vietnam’s VN-Index gained 2.59% on policy initiatives to strengthen investors’ confidence. The latest draft amendment to the Securities Law is expected to be submitted to the National Assembly in October 2024. Key highlights include (i) stricter criteria for professional investors; (ii) allowing commercial banks and foreign bank branches to clear and settle transactions in both the equity and derivative markets; (iii) establishing a legal framework for the VSDC (Vietnam Securities Depository and Clearing Corporation) to create a subsidiary to serve as the central clearing counterparty (“CCP”) of transactions; and (iv) increasing investment limits for fund management companies from 10.00% to 15.00% for a listed company and from 30.00% to 35.00% for a group of related companies.

After many months of rate hikes by the US Fed since 2022 to beat inflations, the easing of inflation rate in the US in recent months has raised market expectations that that rates may start to fall. The market has been hopeful of rate cuts starting as early as March, but the prospect of this happening has been pushed back to the second half of 2024. While the latest inflation data remained sangiune, and the 12-month rate of price increase has slowed to 2.60%, it was still above the Fed’s 2.0% target, and the Fed had indicated that it would wait to see more inflation and labour market data before deciding on any rate cut. Market attention is focused on the Fed’s rate decision at its meeting in September, with high expectations for a rate cut.

So far, resilient US economic data and the prospect of US rate cuts have boosted investor sentiments and pushed the US stock market higher, breaching new historical high. Investors have been pricing in expectation of a lower interest rate environment as early as second half of 2024. This, coupled with corporate earnings reports that have so far been better than expected, has kept investment sentiment buoyant, despite the US market’s elevated valuation and continuing geo-political tensions. Some observers have pointed to some downside risks to economic activity. Any adverse change in the US economic growth trajectory and its consequent effect on corporate earnings would have significant impact on the market.  Escalation of geo-political conflicts could also have major adverse implications for the markets. In the near term, any surprise in the Fed decision on rates in September can be expected to have major impact on the markets.

We are watchful of geo-political developments as well as policy directions in the major economies, in particular US and China.  The continuing Israel-Hamas conflict, and the risk that it may potentially spread in the Middle East, has added to the uncertainties. US economic and inflation data and interest rate policy responses will affect market sentiments and liquidity. Adding to the market uncertainties will be whether it will be Donald Trump or Kamala Harris who will emerge winner in the November 4 US Presidential election, and what it will mean in terms of US economic and foreign policy changes. In Asia, the focus is on the pace of China’s economic recovery which has been weaker than expected.  The Chinese property sector continues to face severe challenges, and any sign of stabilization and growth will have positive catalyst for China’s economy and risk assets. The Chinese government continues to bring forth various measures to help the economy. It may take time for the initiatives to bear fruits.

While we are cautiously optimistic, there remains headwind for risk assets, including continuation of high interest rate and its impact on business and economic activities, and slower than expected economic growth in China, as well as the historically high market valuations in the US. The continuing geo-political tension in Europe, Middle East and in East Asia will keep risk premium elevated at times and result in markets volatility. We will be watchful on these.

The prolonged sell down of Chinese equities and their depressed valuation may offer potential upside should supportive and expansionary Chinese policies to bolster economic activities meet with success.

We continue to apply our strategy of focusing on identifying fundamentally healthy companies with low valuations, low leverage, high growth, robust management and a strong track record, and adherence to our investment philosophy of “Never Fully Invest at All Times” which has served us well over the years.

We thank you once again for your continued faith in us, and hope to remain good stewards in our endeavour to protect and grow your capital.

This article is solely for information purposes. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument, investment product or service. The information contained herein does not have any regard to the specific investment objectives, financial situation or particular needs of any person. Investors may wish to seek advice from a financial advisor before making any investment decision. Past performance is not indicative of future results. An investment is subject to investment risks, including the possible loss of the principal amount invested.

Major US indices performance was mixed. The technology sector corrected following uninspiring result announcements. The economy remained resilient. However, there were signs of weakness, prompting optimism for reduction of interest rate. Dow Jones Industrial Average (DJIA) and S&P 500 were up 4.41% and 1.13% respectively, while Nasdaq Composite corrected 0.75%. US core inflation remained at comfortable level of 2.6% year-on-year in June, but it is still above the Fed’s long-term target of 2.00%. The US composite Purchasing Managers’ Index (PMI) remained firm at 54.3 in July compared to 54.8 in June, suggesting overall activity continued to expand. However, US manufacturing PMI was down to 46.6 from 48.5 a month ago, reflecting contraction in factory activity.

The Stoxx Europe 600 Index gained 1.32%. In the eurozone, a disappointing PMI print, which indicated a slight tempering of eurozone economic growth over the summer, coupled with uncertainties around the French election, likely contributed to softer investors’ sentiment. The PMI weakened in July to 50.2 versus 50.9 in June.

Hong Kong and H shares indices continued to decline on concerns over weak Chinese economy. Hang Seng Index, Hang Seng China Enterprises Index and China’s A shares index returned decrease 2.11%, decreased 3.55% and increase 0.57% respectively. Data released by the National Bureau of Statistics showed that China’s Gross Domestic Product (GDP) expanded 4.7% in the second quarter from the same period a year earlier. That missed the median estimate of 5.1% in a Bloomberg survey of economists. Growth in the first half was 5%, in line with Beijing’s annual target of around 5%. China’s exports rose but fell below market expectations in July, and analysts predicted growth would likely decline in the next few months due to the relatively higher base effect, a possible decline in overseas demand and the implementation of tariffs by the US and EU.

South Korea’s KOSPI Index declined 0.97%. South Korea’s GDP for the April-June period fell 0.2% from a quarter earlier in seasonally adjusted terms, missing a 0.1% gain expected by the market. It was the sharpest fall since the fourth quarter of 2022. Export showed strength as it accelerated in July as growth picked up to 18.2% from 5.1% in June.

Taiwan’s TWSE Index declined 3.62% on profit taking on muted earnings reports from global technology companies. Preliminary government data showed that GDP in the second quarter grew by 5.09% year-on-year, lower than an earlier forecast of 5.18% made in May. The economic number gave investors excuse to take profit despite strong corporate earnings from TSMC.

Singapore’s STI gained 3.69% on positive banking sector results. S&P Global Singapore’s PMI rose to 55.2 in June 2024 from 54.2 in the previous month, marking the fastest expansion in three months. Business activity grew at its quickest rate in 20 months due to a significant increase in new business, driven by stronger underlying demand and business development efforts by Singaporean firms.

Malaysia’s KLCI gained 2.23% on strong domestic fund support amid buoyant sentiment. Malaysia’s economy is estimated to have grown by 5.8% in the second quarter (Q2) of 2024 compared to a year earlier, driven by the services sector and a recovery in exports. This follows a 4.2% growth in Q1. The services sector grew by 5.6%, with significant contributions from wholesale and retail trade, transportation and storage, and finance and insurance.

Thailand’s SET Index gained 1.53% on bargain hunting despite political uncertainty. Economic activities improved. The S&P Global Thailand Manufacturing PMI increased to 51.7 from 50.3 in May, marking the second consecutive month of expansion and the highest reading since June 2023. Output grew at the fastest pace since May 2023, well above the long-term survey average.

Jakarta Composite Index continued to gain momentum, adding 2.72% on domestic bargain hunting. The Ministry of Finance raised its 2024 fiscal deficit target to 2.70% of GDP from the initial 2.30% due to higher spending. This implies a higher deficit financing of IDR 609.7tn from IDR 522.8tn (2023: IDR337tn). Government spending is fixed at IDR 3,412tn (15.1% of GDP) in 2024, a 2.6% increase from the original budget or an increase of 9.3% year-on-year. This will help to boast domestic economic activities.

The Philippines PSE Index gained 3.23%. The annual inflation rate in the Philippines edged down to 3.70% in June 2024, compared to May’s five-month high and market estimates of 3.90%. This marked the lowest inflation rate since March, as prices slowed for housing & utilities (0.10% vs 0.90% in May) and transport (3.10% vs 3.50%). The unemployment rate in the Philippines edged down to 4.10% in May 2024 from 4.30% in the corresponding month of the previous year.

Vietnam’s VN-Index gained 0.50%. On the economy, FDI disbursements for first seven months increased 8% year-on-year to USD12.6bn (July +10% year-on-year to USD1.7bn) representing the highest level since 2012. 7MFY2024 FDI registrations were up 11% year-on-year to USD18.0bn (July +0% year-on-year to USD2.8bn). Singapore led FDI registrations, accounting for 36% of the total, followed by Hong Kong (12%), Japan (11%), China (9%) and South Korea (9%).

After many months of rate hikes by the US Fed since 2022 to beat inflations, the easing of inflation rate in the US in recent months has raised market expectations that that rates may start to fall. The market has been hopeful of rate cuts starting as early as March, but the prospect of this happening has been pushed back to the second half of 2024.  While the latest inflation data remained sanguine, and the 12-month rate of price increase has slowed to 2.6%, it was still above the Fed’s 2% target, and the Fed had indicated that it would wait to see more inflation and labour market data before deciding on any rate cut. Market attention is focused on the Fed’s rate decision at its meeting in September.

So far, resilient US economic data and the prospect of US rate cuts have boosted investor sentiments and pushed the US stock market higher, breaching new historical high. Investors have been pricing in expectation of a lower interest rate environment as early as second half of 2024. This, coupled with corporate earnings reports that have so far been better than expected, has kept investment sentiment buoyant, despite the US market’s elevated valuation and continuing geo-political tensions. Some observers have pointed to some downside risks to economic activity. Any adverse change in the US economic growth trajectory and its consequent effect on corporate earnings would have significant impact on the market.  Escalation of geo-political conflicts could also have major adverse implications for the markets.

We are watchful of geo-political developments as well as policy directions in the major economies, in particular US and China. The continuing Israel-Hamas conflict, and the risk that it may potentially spread in the Middle East, has added to the uncertainties. US economic and inflation data and interest rate policy responses will affect market sentiments and liquidity. Adding to the market uncertainties will be whether it will be Donald Trump or Kamala Harris who will emerge winner in the November 4 US Presidential election, and what it will mean in terms of US economic and foreign policy changes. In Asia, the focus is on the pace of China’s economic recovery which has been weaker than expected. The Chinese property sector continues to face severe challenges, and any sign of stabilization and growth will have positive catalyst for China’s economy and risk assets. The Chinese government continues to bring forth various measures to help the economy. It may take time for the initiatives to bear fruits.

While we are cautiously optimistic, there remains headwind for risk assets, including continuation of high interest rate and its impact on business and economic activities, and slower than expected economic growth in China, as well as the historically high market valuations in the US. The continuing geo-political tension in Europe, Middle East and in East Asia will keep risk premium elevated at times and result in markets volatility. We will be watchful on these.

The prolonged sell down of Chinese equities and their depressed valuation may offer potential upside should supportive and expansionary Chinese policies to bolster economic activities meet with success.

We continue to apply our strategy of focusing on identifying fundamentally healthy companies with low valuations, low leverage, high growth, robust management and a strong track record, and adherence to our investment philosophy of “Never Fully Invest at All Times” which has served us well over the years.

We thank you once again for your continued faith in us, and hope to remain good stewards in our endeavour to protect and grow your capital.

This article is solely for information purposes. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument, investment product or service. The information contained herein does not have any regard to the specific investment objectives, financial situation or particular needs of any person. Investors may wish to seek advice from a financial advisor before making any investment decision. Past performance is not indicative of future results. An investment is subject to investment risks, including the possible loss of the principal amount invested.

Risk assets continued to advance in selective markets in June 2024, principally those benefiting from the semi-conductor upcycle and AI theme. The Far East ex-Japan index outperformed the developed markets. The MSCI Far East ex-Japan Index gained 3.06%, while the MSCI World Index gained 1.93%. Among the Far East ex-Japan markets, Taiwan and Korea shares performed well, while ASEAN equities lagged with a return of 0.26%. Asean markets were generally down, with the exception of Indonesia which eked out a small gain, although Year To Date (YTD), Jakarta composite index was still down 2.88%. Taiwan shares (+8.77%) and Korea shares (+6.12%) were the top performers in June.  Taiwan was also the best performing market YTD (+28.45%).  The laggards were China A shares (-3.30%), Thailand shares (-3.32%) and Hong Kong shares (-2.00%). Regional currencies were mixed against the USD. The best performing currencies were Korea Won (+0.67%), Thai baht (+0.19%) and Taiwan NT (+0.09%), while the weaker ones were Indonesia Rupiah (-0.75%) and Chinese Yuan (-0.35%).

Major US indices gained momentum from May’s advances. The market rose on a resilient economic outlook. However, there were signs of weakness, prompting optimism for a reduction in interest rates. US employment edged up to 4.0% in May, and consumer confidence and retail sales remained weak. The Dow Jones Industrial Average (DJIA), S&P 500, and Nasdaq Composite were up 1.12%, 3.47%, and 5.96% respectively. US core inflation hit a three-year low at 2.6% year on year in May. The US composite Purchasing Managers’ Index (PMI) remained firm at 54.6 in June compared to 54.5 in May, suggesting activity continued to expand.

The Stoxx Europe 600 Index declined by 1.30% due to political uncertainty as the France and UK elections draw near. In the eurozone, the ECB cut interest rates in June by 0.25% to 3.75%, its first cut in five years. However, May’s core inflation remained sticky at 2.9%. Indications are that the ECB will wait to assess new data on the economy and inflation outlook before deciding on its next rate move.

Hong Kong and H-share indices corrected on profit-taking. The Hang Seng Index, Hang Seng China Enterprises Index, and China’s A-shares index declined by 2.00%, 0.95%, and 3.30%, respectively. China’s exports continued to strengthen with an increase of 7.6% Year on Year in May after edging up by 1.5% Year on Year in April. The export growth was bolstered by recovering global manufacturing activities. However, property investment declined further in May, while the growth of infrastructure investment weakened, leading to a slowdown in total fixed asset investment growth.

South Korea’s KOSPI Index gained 6.12%. South Korea’s exports rose for the ninth consecutive month in June, albeit at a slower pace than expected, as robust demand for chips and cars bolstered the export recovery. The Korean government plans to offer various tax benefits and tax reforms to facilitate the Korean Value-Up Program, which will improve shareholder value and boost investor sentiment.

Taiwan’s TWSE Index gained 8.77%, driven by technology shares, specifically the semiconductor sector. May export orders were up 7.0% Year on Year, beating the forecast of 6% and the consensus of 6.2% growth Year on Year. Taiwan export orders totalled US$48.89 billion in May, up 3.8% Month on Month (seasonally adjusted up 0.60%) and 7.00% Year on Year, beating the forecast of 6.00% and the consensus of 6.20% Year on Year growth.

Singapore’s STI declined by 0.11% on profit-taking. Singapore’s overall factory manufacturing activity grew slower despite favourable business conditions in the region. The Purchasing Managers’ Index (PMI) dropped 0.2 points to 50.4, the lowest so far this year. It still marks a healthy 10th straight month of expansion.

Malaysia’s KLCI declined by 0.41% on profit-taking. However, domestic flow remained strong, and investors’ sentiment remained high on ample domestic liquidity. The seasonally adjusted S&P Global Malaysia Manufacturing PMI posted 49.9 in June, broadly in line with the neutral 50.0 mark. S&P Global Market Intelligence reported that the latest figure presented a less positive picture compared to May when operating conditions improved slightly, with the PMI recording 50.2.

Thailand’s SET Index continued to weaken, declining by 3.32% amidst political uncertainty. Thailand’s economy expanded in May 2024, though at a slower pace than in the previous month, due to declines in exports, manufacturing production, and private investment, according to the Bank of Thailand. The bright spot is the tourism sector, which showed positive signs with continued growth from the previous month.

The Jakarta Composite Index recovered, gaining 1.33% on domestic bargain hunting. Indonesia’s annual inflation rate slowed to 2.51% in June 2024, driven mainly by declines in food, beverage, and tobacco prices. The largest contributor to the monthly deflation was the food, beverages, and tobacco group, which saw a 0.49% decrease and contributed 0.14% to the overall deflation in June.

The Philippines’ PSE Index declined by 0.33%. Investment sentiment continued to be affected by tension between the country and China in the South China Sea region. The Philippines’ GDP growth is expected to rebound to 6% in 2024 and 6.2% in 2025, on the back of stronger consumption demand, higher public and private investment, and a recovery in exports, according to International Monetary Fund (IMF) official Elif Arbatli Saxegaard.

Vietnam’s VN-Index declined by 1.30% on profit-taking. The economic outlook remained robust with second quarter GDP growing 6.9% Year on Year (the 2nd highest 2Q growth since 2019, only lower than 2QFY 2022 +8%). Foreigners net sold US$175 million (the 17th consecutive week of net selling) year to date.

After many months of rate hikes by the US Fed since 2022 to beat inflation, the easing of inflation in the US in recent months has raised market expectations that rates may start to fall. Fed officials have forecast several rate cuts at the beginning of 2024, although whether this will materialize depends on the economic data at that time. The market was hopeful for rate cuts as early as March, but the prospect of this happening has been pushed back to the second half of 2024. While May inflation data did not increase, and the 12-month rate of price increase has slowed to 2.6%, it remains above the Fed’s 2% target. The Fed will wait for more inflation and labor market data before deciding on any rate cut.

Resilient US economic data, good corporate results from major US tech companies, plays on companies benefiting from AI, and the prospect of US rate cuts have boosted investor sentiment and pushed the US stock market to new historical records. However, the ‘higher-for-longer’ narrative on US interest rates appears to be regaining some prominence, with observers pointing to some downside risks to economic activity.

US economic and inflation data, expectations regarding the Fed’s rate decisions, will continue to have a major influence on investors’ decisions on risk assets in the US and elsewhere. Investors are pricing in a lower interest rate environment as early as the second half of 2024. This, coupled with better-than-expected earnings reports and a more resilient economy, has kept investment sentiment buoyant despite the US market’s elevated valuation and continuing geopolitical tensions.

We are watchful of geopolitical developments and policy directions in major economies, particularly the US and China. The ongoing Israel-Hamas conflict and the risk of its potential spread in the Middle East have added to the uncertainties. US economic and inflation data and interest rate policy responses will affect market sentiment and liquidity. Following the first presidential debate between Joe Biden and his challenger, Donald Trump, attention is focused on whether Biden will remain the Democratic Party nominee in the November 4 US Presidential election, who will win the race, and how it will affect US policies. In Asia, the focus is on the pace of China’s economic recovery, which has been weaker than expected. The Chinese property sector continues to face severe challenges, and any sign of stabilization and growth will act as a positive catalyst for China’s economy and risk assets. The Chinese government has announced various measures to help the economy and the property sector in particular. It may take time for these initiatives to bear fruit.

While we remain cautiously optimistic, there are headwinds for risk assets, including the continuation of high interest rates and their impact on business and economic activities, slower-than-expected economic growth in China, and escalating valuations in the US. Continuing geopolitical tension in Europe and East Asia, along with the new conflict in the Middle East, will keep risk premiums elevated and result in market volatility. We will stay watchful of these developments.

The prolonged sell-off of Chinese equities and their depressed valuations may offer potential upside should supportive and expansionary Chinese policies to bolster economic activities succeed.

We continue to apply our strategy of focusing on identifying fundamentally healthy companies with low valuations, low leverage, high growth, robust management and a strong track record, and adherence to our investment philosophy of “Never Fully Invest at All Times” which has served us well over the years.

We thank you once again for your continued faith in us, and hope to remain good stewards in our endeavour to protect and grow your capital.

This article is solely for information purposes. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument, investment product or service. The information contained herein does not have any regard to the specific investment objectives, financial situation or particular needs of any person. Investors may wish to seek advice from a financial advisor before making any investment decision. Past performance is not indicative of future results. An investment is subject to investment risks, including the possible loss of the principal amount invested.

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