[Covid-19 Latest Updates] KLSE Index Rebounded

For the past 2 weeks, the Malaysia stock market has a very interesting move.

Many stocks have started to rebound since the end of March.

The majority of the indices has started the road to recovery.

As a value investor, we can start to look at the good fundamental companies and start to accumulate in stages.

Today we will look at the below indices:

• FBMKLCI
• REIT Index
• Construction
• Technology

FBMKLCI

Observing the long term chart, we can see that FBMKLCI has been on a downtrend for quite some time since mind of 2018.

It was then the period of general election.

The lost of BN to Pakatan Harapan seems to put a turnaround to the direction of the stock market.

With political uncertainties. investor's confidence is still not yet recovered.

With the recent Covid-19 issue, the trend for FBMKLCI continues to continue on the downtrend.

We do see some rebound since the end of March.

Suggest to nimble by stages, and only accumulate good quality stock with strong fundamentals that will not be affected by the Covid-19 pandemic issue.


REIT Index

REIT is also seen to started a slight downtrend since the end of 2019.

However, due to the cut in interest rate, it expects to benefit REIT.

But at the same time, as the impact of MCO due to the Covid-19, many retailers would have suffered cash flow issue, and may not be able to pay their rent or continue their businesses.

This will potentially impact REIT income.

Suggest adding with caution.

Avoid small REIT player, and focus on strong REIT counter only.

Choose only those that be able to sustain their dividend payout.

Need to study deeper of which REIT that has their business being impacted the most.


Construction Index

Construction is also on a downtrend since 2017.

It started to recover in early 2019 but then stay in a range-bound area for second half of 2019.

Needless to say, early 2020, construction index is also seeing a similar drop with other indices as well.

I will not be touching construction for now.


Technology Index

Of all the indices, technology is a little bit different.

We can see that technology is having an uptrend since early 2019.

The bull run was halted with the sudden issue of Covid-19.

After Covid-19 ends, I believe the technology counter will continue its run again.

Suggest investors to add some position, and the probability of winning is much higher over construction definitely, based on the indices performance so far.

Nevertheless, anything can happen, as we do understand some of the supply plan was impacted due to the MCO/EMCO order.

So investors need to pick counters that have more to online business over something that is related to offline operations.

Do study the business model thoroughly.



Conclusion

With the recent volatility in the stock market. suggest investor to remain calm and do not do panic selling.

Add good quality stock after studying their fundamentals.

Above approach is based on top down approach analysis.

Further analysis is required to study the individual stock and company performance before ones started to deploy their capital.

Always do your own research that follow according to your investment objective.


Happy Investing! 😉


Link:
https://www.bursamalaysia.com/trade/trading_resources/listing_directory/indices-profile?stock_code=0050I
https://www.thestar.com.my/business/business-news/2019/07/17/reits-sector-likely-to-have-bumpy-ride
https://www.theedgemarkets.com/article/investing-review-mreits