Entries by Affin Hwang Asset Management

Investor Resolutions for 2019: De-risk, Do Less and Diversify

2018: When Volatility Returned As we close the chapter in another year, there is no better time to trawl back through the pages and ponder on the year that was. For investors, 2018 will be remembered as the ‘reset year’ for markets. When things finally took a pause and markets remembered to take a breather after consecutive rallies. Investors attempting to chase after the highs and lows of the stock market were also left breathless amidst the frenzy. But as the late-cycle approaches, how should investors position themselves then for 2019 as returns expectations are pared down and global central banks continue to normalise monetary policy? If you’re still stuck on resolutions, here are 3 ideas to consider on how you can position your portfolio to ride through the volatility ahead. Resolution 1: De-risk your Portfolio Amidst a litany of concerns, markets see-sawed between gains and losses throughout the year as a protracted trade conflict between US and China kept investors on edge. Mixed signals from US President Donald Trump and his penchant for Twitter diplomacy didn’t help things either. The temporary trade truce brokered between US and China may prove to be fragile and mercurial as the President’s infamous […]

Emerging Market Outlook 2019: Mind the Yield Gap

In the following interview Lim Chia Wei, Portfolio Manager, Affin Hwang Asset Management shares his outlook for emerging markets (EM) and what 2019 would herald for investors. 1) It’s been an eventful year for EMs in 2018. From the US-China trade war, rout in EMs stemming from the Turkish lira plunge and Argentina debt crisis, What’s your take of markets for 2018 and how would you sum-up the year? 2018 was a reset year for markets. After a strong rally, the markets is finally catching its breath and are beginning to reprice growth and expectations. The EM market started 2018 strong, but subsequently weakened materially in the year. Many were caught off guard by how far the US-China trade dispute escalated and how quickly the economic growth slowed down momentum within EMs. The deceleration of growth began even before the negative impact of trade tariff took place. 2) Looking forward to 2019, what are some of the key investment themes and risks that you are monitoring for EMs? There are three risks that stand out. The first is the event of a protracted and escalating geopolitical tension between the US and China. The geopolitical tension could evolve beyond trade to […]

Affin Hwang AM Forms Strategic Partnership with Samsung Asset Management to Develop Leveraged & Inverse ETFs

KUALA LUMPUR – Affin Hwang Asset Management Berhad (“Affin Hwang AM” or “the Company”) announced today that it has entered into a strategic partnership with Samsung Asset Management (Hong Kong) Limited (“Samsung”) to drive product innovation across a range of initiatives, including the development and offering of Leveraged & Inverse (L&I) ETFs on the country’s stock exchange. This comprehensive alliance will seek to deliver value to local investors by providing them access to sophisticated investment instruments at a low-cost and efficient entry point to amplify or hedge returns depending on prevailing market conditions and the investor’s own risk-appetite and objective. Under the terms of the partnership agreement, Affin Hwang AM will appoint Samsung as its Investment Advisor to provide advisory services in the management of its derivative type ETFs including L&I products through shared resources and expertise. Teng Chee Wai, Managing Director of Affin Hwang AM said, “With a shared aspiration to be product innovation leaders in the market, we are excited to join hands with Samsung to pioneer a new range of ETF strategies to meet the growing needs of investors.” “Given Samsung’s strong capabilities and success in managing L&I products, we believe that we are able to capitalise […]

Budget 2019 – Awakening the Tiger

Not as Bad as Expected Local markets breathed a collective sigh of relief last week as the much awaited Budget 2019 proved to be less harmful than initially expected. Severe austerity measures to cut costs as well as rumours of new taxes did not materialise. Instead, Pakatan Harapan’s (PH) maiden federal budget was a mildly expansionary one which stuck to fiscal consolidation, whilst providing a social safety net to the vulnerable B40 group. In a 2-hour speech in Parliament, Finance Minister YB Lim Guan Eng outlined 12 strategic thrusts to return Malaysia’s economic position as an Asian Tiger focusing on 3 areas including institutional reforms, shared economic prosperity and fostering a culture of entrepreneurship. The government had forecasted lower GDP growth of 4.9% for 2019 amidst uncertainty in the global economic landscape. Expectations of lower growth have already been well telegraphed to the market and this lower growth projection had limited impact. To shore up its revenue base, the government expects to collect a RM30 billion special dividend from Petronas which sends a clear signal to investors that the government would be the one assuming its massive debt burden instead of the Rakyat. The corporate tax rate was also reduced […]

What to Expect from US Midterm Elections – How Would Markets React?

In the following interview Huang Juin Hao, Senior Portfolio Manager of Affin Hwang Asset Management shares his thoughts on what to expect from US midterm elections and its implications to markets.   1. When is US midterm elections and what will the electorate be focusing on? Less than a week, the US will hold its midterm elections that could have major implications to markets depending on the results. The American electorate will head to the polls on 6th November 2018 where they would weigh their political vote on a wide spectrum of issues ranging from the economy, immigration, trade, gun control, climate change, etc.   2. What are the likely outcomes and implications to markets? According to September polling data, the Democrats could make inroads and wrest back control of the House of Representatives whilst the Republicans would retain control of the Senate. Assuming that happens, this could stifle legislative progress and policy aims of the Trump administration which would impair US President Donald Trump’s ability to pass legislation, possibly leading to a freeze in domestic fiscal policy and register as voter disagreement over trade-tariffs. This could set the stage for a weaker US dollar and a slower pace of […]

Wild Ride in Markets Driving You Up the Wall?

Are Markets Making you Sick? Investing can be a mentally stimulating excursion. At once a highly regimented art form deeply rooted in technical analysis & financial theory, but also reliant on gut feel, grit and plenty of gumption. So when markets vault and fall, some investors can get overwhelmed and be swept away by the volatility. Studies have shown that stock market volatility has a direct correlation to increased hospitalisation rates and incidences of mental health disorders. A research produced in 2014 which tracked hospitalisation health records close to three decades (1983 – 2011) found that daily fluctuations in stock prices has an almost immediate impact on the physical health of investors, with sharp price declines increasing hospitalization rates over the next two days. In a chilling example, on October 19, 1987 otherwise known as Black Monday, the US stock market plunged by over 25% which led to hospital admissions spiking by over 5% on the same day (Source: “Worrying About the Stock Market: Evidence from Hospital Admissions” by Joseph Engelberg and Christopher Parsons, University of California- San Diego, October 2014).  Sounds alarming, but that’s what the data shows. However, the important lesson here is that whilst markets are bound […]

Unpacking US-China Trade Tensions: Brace for Further Escalation

In the following interview Huang Juin Hao, Senior Portfolio Manager of Affin Hwang Asset Management shares his views on the brewing trade tensions between US and China, as well as its implications to markets and global supply chains.   1. We’ve seen tensions escalate between US and China amidst newfound allegations of hacking by Chinese authorities. Help us unpack what happened this week in the latest string of incidents that have tested relations between the two countries? Reports by Bloomberg Businessweek show that investigators have found Chinese microchips were being implanted into servers sold by US-based Supermicro, a leading supplier of server motherboards. These chips were supposedly inserted at factories run by Supermicro’s subcontractors in China and reportedly ended up into almost 30 US companies, including Apple and Amazon, and in the latest news, an undisclosed major US telecommunications company. As a result of the allegations, Supermicro shares have fallen by over 40%, and the 3 named companies, Supermicro, Apple and Amazon have replied with strong statements disputing the allegations. Technology experts have expressed doubts that China could have performed the allegations as detailed according to Bloomberg, and the US Department of Homeland Security and UK’s National Cyber Security Centre, […]