on our portfolio - i3investor€¦ · on our portfolio 22 december 2014 pp7004/02/2013(031762) page...

On Our Portfolio

22 December 2014

PP7004/02/2013(031762) of 7

On Our Portfolio

How Long The Rally Can Last? By the Kenanga Research Team l [email protected] The recent strong rebound in the FBMKLCI could be s hort -lived in view of the unfavourable macro factors. While the fundamentals and trading sentiment have improved essentially in the U.S., the other gloomy factors ( i.e. lower crude oil prices and weak Ringgit against USD) still provide a greater challe nge to the country’s economy in 2015. In view of the higher volatility ahead, we have liquid ated all our model portfolios on last Friday, which have outperformed the FBMKLCI total r eturn by 1,798-2,445 bps, marked the second consecutive year of outperforming (2013: 740 -1,954 bps). Moving forward, we will unveil our 2015 model portfolios on 5 th of January with a limelight focus on (i) GST play, (ii) M&A, and (iii) export-oriental sectors/stocks.

Sustainability is the key. We believe the recent strong rebound in the FBMKLCI could be short-lived in view of the unfavourable macro factors. With the crude oil prices continue to stay low coupled with a persistent weak Ringgit (against USD) and the upcoming GST implementation; the country’s economy outlook appeared challenging in 2015. Meanwhile, the relatively steep FBMKLCI’s valuation (against the regional peers) coupled with hostile economy/currency outlook in Russia may continue to led the foreign investors to reassess their investments in the local equity market. As of last Friday, foreigners continued to be a net seller for 18th consecutive days with a total net outflow of c.RM3.1b (since 26th of Nov.). Having said that, while we believe the FBMKLCI may have found some supports followed

the recent strong rebound, there is a risk of further earnings downgrading (should we adopted a more conservative view on our banking, plantation, and oil & gas sectors), and thus, could limit the potential upside from here. Technically speaking, the benchmark index immediate resistance levels are at 1,727 (R1) and 1,759 (R2) while its key support levels are located at 1,707 (S1), followed by 1,691 (S2) next.

Santa Rally. After taking a beating earlier this month, investors have finally been getting Santa Claus rally that they wished for. U.S. Fed in its final policy statement on last week stated that it ‘can be patient in beginning to normalise the stance of monetary policy’, which led Wall street forecasters to interpret the authority won’t hike short-term rates any earlier than the middle of next year and could even wait until later in 2015. On top of that, the Fed also reiterated more optimistic projections for the country’s economy for 2015 and believes the unemployment will drop further. These generous statements have cheered the US as well as the global equity market to rebound strongly on last week albeit the volatility of Russian Ruble and crude oil prices continued to remain low. At the end of last Friday’s closing bell, the barometer index rebounded strongly and narrowed the losses to 17pts or -1.0% WoW to 1,715.99, mainly dragged down by PBBANK (-2.3% WoW), SIME (-2.6%) and FGV (-14.2%).

Celebrate our Christmas holiday early. In view of the recent high volatility coupled with unfavourable macro factors, we have decided to close all our model portfolios on last Friday (based on their respective closing price). With that, we have recorded a second consecutive of outperform year and beat the FBMKLCI total return by 1,798–2,445bps (2013: 740-1,954bps with a total returns of 21%-33%). THEMATIC portfolio (20.96%) was our top performer followed by GROWTH (16.39%) and DIVIDEND (14.49%) portfolios vs. -3.49% total returns in the FBMKLCI. Our strong portfolios’ performances in 2014 were mainly due to (i) the absence of Oil & Gas counters, (ii) higher return recorded in the telecom stocks, (iii) decent dividend received, as well as (iv) strong performance in some alpha stocks' selection. On top of that, our passive investment strategy adopted in the 2H14 also helped us to prevent any trading trap that arises during the volatile market, especially in the 4Q14.

2015 model portfolios are set to unveil on the 5 th of January. In view of the current unfavourable macro factors, we believe ‘’focused theme plays’’ will be the key to success in 2015. A part of the usual blue chips' selection, our stocks pick will be also focused on GST play, M&A, and export oriented counters/sectors. Meanwhile, bottom-fishing in the Oil & Gas sector could also provide some trading opportunities, we believe.

Total Return (%) Key economic events to watch Date Consensus WoW YTD

FBMKLCI -0.98% -3.49% US GDP Annualized QoQ – 3Q T 23-Dec 4.3% Thematic 20.96% US Univ. of Michigan Confidence – Dec F 23-Dec 93.3 Growth 16.40% UK GDP YoY – 3Q F 23-Dec 3.0% Dividend Yield 14.49% Germany Import Price Index YoY – Nov 22-Dec -2.0%

On Our Portfolio 22 December 2014

PP7004/02/2013(031762) of 7

Retail Model Portfolio - THEMATIC

No

CATS Code Company

Last Buy/Sell

Date

No. of Shares

Average Cost

Avg Cost/ Share

Share Price

@ 19

Dec 14

Value Unrealised Profit / (Loss)

% Change

YTD

Weighting (as % of

NAV)

Latest Dividend Ex-Date

Gross Div

Consensus 12M Div

Yield

KNK’s/ Consensus’

TP

Potential Upside/

Downside

RM RM RM RM RM % % RM % RM %

Total Dividend Received YTD 1,678

Total Realised Return 19,280 Total Return (based on the total allocated amount of RM100k) 20,958 20.96%

KLCI FBMKLCI Index 1,834.74 1,715.99 (118.75) -6.47% 3.34

KLCI – TOTAL RETURN -3.49%

Total Realised Return

No. CATS Code Industry / Company Last Buy/Sell Date No of Shares Cost @ Avg Cost/Share Share Price @ Value Realised % Change

RM RM RM RM RM %

1 1066 RHB CAPITAL BHD 26-Mar-14 1,500 12,420 8.28 8.35 12,525 105 0.85%

2 9059 TSH RESOURCES BHD 30-May-14 5,000 14,600 2.92 4.00 20,000 5,400 36.99%

3 1066CR RHB CAPITAL-CW15 17-Jun-14 50,000 11,000 0.22 0.25 12,500 1,500 13.64%

4 7155WA SKP RESOURCES-CW17 26-Jun-14 80,000 8,000 0.10 0.21 16,800 8,800 110.00%

5 0032WA REDTONE INTERNATIONAL-CW 8-Aug-14 15,000 6,300 0.42 0.495 7,425 1,125 17.86%

6 0149 FIBON BHD 12-Sep-14 30,000 16,200 0.54 0.505 15,150 (1,050) -6.48%

7 7087 MAGNI-TECH INDUSTRIES BHD 24-Oct-14 6,000 19,020 3.17 2.960 17,760 (1,260) -6.62%

8 7106 SUPERMAX CORP BHD 14-Nov-14 8,000 18,400 2.30 2.030 16,240 (2,160) -11.74%

9 5347 TENAGA NASIONAL BHD 19-Dec-14 1,500 16,500 11.00 13.620 20,430 3,930 23.82%

10 0032 REDTONE INTERNATIONAL BHD 19-Dec-14 20,000 14,900 0.75 0.720 14,400 (500) -3.36%

11 6947 DIGI.COM BHD 19-Dec-14 3,000 14,910 4.97 6.100 18,300 3,390 22.74%

19,280

Total Dividends Received

No CATS Code Company No. of Shares Ex-Date Gross Div Div Rec 1 6947 DIGI.COM BHD 3,000 19-Feb-14 0.07 210.00

2 6947 DIGI.COM BHD 3,000 9-May-14 0.06 186.00

3 5347 TENAGA NASIONAL BHD 1,500 15-May-14 0.10 150.00

4 9059 TSH RESOURCES BHD 5,000 2-Jun-14 0.04 175.00

5 6947 DIGI.COM BHD 3,000 5-Aug-14 0.06 186.00

6 7087 MAGNI-TECH INDUSTRIES BHD 6,000 21-Oct-14 0.05 300.00

7 6947 DIGI.COM BHD 3,000 5-Nov-14 0.06 186.00

8 5347 TENAGA NASIONAL BHD 1,500 17-Dec-14 0.19 285.00

TOTAL DIVIDEND RECEIVED 1,678.00


PP7004/02/2013(031762) of 7

Retail Model Portfolio - GROWTH

No. CATS Code Industry / Company

Last Buy/Sell

Date

No. of Shares

Average Cost

Avg Cost/ Share

Share Price

@ 19 Dec

14

Value Unrealised

Profit / (Loss)

% Change

YTD

Weighting (as % of

NAV)


Gross Div

Consensus 12M Div

Yield


TP

Potential Upside/

Downside

RM RM RM RM RM % % RM % RM %


Total Realised Return 14,990

Total Return (based on the total allocated amount of RM100k) 16,395 16.40%




No. CATS Code Industry / Company Last Buy/Sell

Date No of Shares Cost @ Avg Cost/Share Share Price @ Value Realised % Change

RM RM RM RM RM %

1 1066 RHB CAPITAL BHD 26-Mar-14 1,500 12,420 8.28 8.350 12,525 105 0.85%

2 1066CR RHB CAPITAL-CW15 17-Jun-14 50,000 11,000 0.22 0.250 12,500 1,500 13.64%


4 0032WA REDTONE INTERNATIONAL-CW 8-Aug-14 15,000 6,300 0.42 0.495 7,425 1,125 17.86%

5 0149 FIBON BHD 12-Sep-14 30,000 16,200 0.54 0.505 15,150 (1,050) -6.48%


7 7106 SUPERMAX CORP BHD 14-Nov-14 8,000 18,400 2.30 2.030 16,240 (2,160) -11.74%

8 5347 TENAGA NASIONAL BHD 19-Dec-14 1,500 16,500 11.00 13.620 20,430 3,930 23.82%

9 3336 IJM CORP BHD 19-Dec-14 3,000 17,550 5.85 6.620 19,860 2,310 13.16%

10 0032 REDTONE INTERNATIONAL BHD 19-Dec-14 20,000 14,900 0.75 0.720 14,400 (500) -3.36%

11 5219 PESTECH INTERNATIONAL BHD 19-Dec-14 5,000 12,720 2.54 2.940 14,700 1,980 15.57%

14,990

Total Dividends Received

No CATS Code Company No. of Shares Ex-Date Gross Div Div Rec 1 5347 TENAGA NASIONAL BHD 1,500 15-May-14 0.10 150.00

2 3336 IJM CORP BHD 3,000 10-Jun-14 0.10 300.00

3 5219 PESTECH INTERNATIONAL BHD 5,000 18-Aug-14 0.04 200.00


5 5219 PESTECH INTERNATIONAL BHD 5,000 23-Oct-14 0.02 100.00

6 3336 IJM CORP BHD 3,000 12-Dec-14 0.04 120.00

7 5347 TENAGA NASIONAL BHD 1,500 17-Dec-14 0.19 285.00



PP7004/02/2013(031762) of 7

Retail Model Portfolio - DIVIDEND YIELD

No CATS Code

Industry / Company Last Buy/Sell Date

No. of Shares

Average Cost

Avg Cost/ Share

Share Price

@ 19 Dec

14

Value Unrealised Profit / (Loss)

% Chg. YTD

Weighting (as % of

NAV)


Gross Div

Consensus 12M Div

Yield


TP

Potential Upside/

Downside

RM RM RM RM RM % X RM % RM %


Total Realised Return 11,399

Total Return (based on the total allocated amount of RM100k) 14,487 14.49%




No. CATS Code Industry / Company Last Buy/Sell

Date No of Shares Cost @ Avg Cost/Share Share Price @ Value Realised % Change

RM RM RM RM RM %

1 4863 TELEKOM MALAYSIA BHD 28-Mar-14 2,500 13,475 5.39 5.93 14,825 1,350 10.02%


3 0149 FIBON BHD 12-Sep-14 30,000 16,200 0.54 0.505 15,150 (1,050) -6.48%


5 1562 BERJAYA SPORTS TOTO BHD 19-Dec-14 4,093 16,045 3.92 3.53 14,448 (1,596) -9.95%

6 1155 MALAYAN BANKING BHD 19-Dec-14 1,500 14,865 9.91 8.78 13,170 (1,695) -11.40%

7 6947 DIGI.COM BHD 19-Dec-14 3,000 14,910 4.97 6.10 18,300 3,390 22.74%

8 9571 MITRAJAYA HOLDINGS BHD 19-Dec-14 25,000 19,375 0.78 0.91 22,625 3,250 16.77%

11,399 Total Dividends Received

No CATS Code Company No. of Shares Ex-Date Gross Div Div Rec 1 1562 BERJAYA SPORTS TOTO BHD 4,000 9-Jan-14 0.06 240.00

2 6947 DIGI.COM BHD 3,000 19-Feb-14 0.07 210.00

3 1155 MALAYAN BANKING BHD 1,500 29-Apr-14 0.31 465.00

4 6947 DIGI.COM BHD 3,000 9-May-14 0.06 186.00

5 1562 BERJAYA SPORTS TOTO BHD 4,093 16-Jul-14 0.07 286.51

6 6947 DIGI.COM BHD 3,000 5-Aug-14 0.06 180.00

7 9571 MITRAJAYA HOLDINGS BHD 25,000 26-Aug-14 0.02 500.00

8 1155 MALAYAN BANKING BHD 1,500 25-Sep-14 0.24 360.00

9 1562 BERJAYA SPORTS TOTO BHD 4,093 7-Oct-14 0.06 225.12


11 6947 DIGI.COM BHD 3,000 5-Nov-14 0.06 186.00



PP7004/02/2013(031762) of 7

Portfolios Total Return (based on the total allocat ed amount) vs FBMKLCI Performance

Source: Bloomberg, Kenanga Research

Portfolios Invested Amounts

Source: Bloomberg, Kenanga Research


PP7004/02/2013(031762) of 7

Daily Charting: FBMKLCI Weekly Charting: FBMKLCI

Daily Charting: FBM70 Weekly Charting: FBM70

Daily Charting: FBMSC Weekly Charting: FBMSC

Daily Charting: DJIA Weekly Charting: DJI A

Source: Bloomberg


PP7004/02/2013(031762) of 7

Stock Ratings are defined as follows: Stock Recommendations OUTPERFORM : A particular stock’s Expected Total Return is MORE than 10% (an approximation to the 5-year annualised Total Return of FBMKLCI of 10.2%). MARKET PERFORM : A particular stock’s Expected Total Return is WITHIN the range of 3% to 10%. UNDERPERFORM : A particular stock’s Expected Total Return is LESS than 3% (an approximation to the 12-month Fixed Deposit Rate of 3.15% as a proxy to Risk-Free Rate). Sector Recommendations*** OVERWEIGHT : A particular sector’s Expected Total Return is MORE than 10% (an approximation to the 5-year annualised Total Return of FBMKLCI of 10.2%). NEUTRAL : A particular sector’s Expected Total Return is WITHIN the range of 3% to 10%. UNDERWEIGHT : A particular sector’s Expected Total Return is LESS than 3% (an approximation to the

12-month Fixed Deposit Rate of 3.15% as a proxy to Risk-Free Rate). ***Sector recommendations are defined based on market capitalisation weighted average expected total return for stocks under our coverage.

This document has been prepared for general circulation based on information obtained from sources believed to be reliable but we do not make any representations as to its accuracy or completeness. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may read this document. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees. Kenanga Investment Bank Berhad accepts no liability whatsoever for any direct or consequential loss arising from any use of this document or any solicitations of an offer to buy or sell any securities. Kenanga Investment Bank Berhad and its associates, their directors, and/or employees may have positions in, and may effect transactions in securities mentioned herein from time to time in the open market or otherwise, and may receive brokerage fees or act as principal or agent in dealings with respect to these companies.

Published and printed by: KENANGA INVESTMENT BANK BERHAD (15678-H) 8th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia Chan Ken Yew Telephone: (603) 2166 6822 Facsimile: (603) 2166 6823 Website: www.kenanga.com.my Head of Research

on our portfolio - i3investor€¦ · on our portfolio 22 december 2014 pp7004/02/2013(031762) page...

Documents