Wealth Management Digest April 2020 - Ambank
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Wealth Management Digest
April 2020
Exclusively for AmBank SIGNATURE Priority Banking Customers
Wealth Management Digest │ April 2020
Table of Contents
Page No.
News Topics – Business 3
News Topics – Economy 5
News Topics – Geopolitical 7
Economic Events – Graphs 9
Equity Market Performance 10
Fixed Income - Market Performance & Prices 13
Alternative Investment - Market Performance & Prices 14
Forex Performance Table 15
Asset Allocation Strategy 16
Fund Focus 17
Fund Performance Table 19
Definitions 20
Disclaimer 22
Key Take Aways
Bitcoin falls sharply as crypto Companies weigh currency-
Oil-field-service stocks are
gets caught in global hedging strategies amid
getting scrapped….
selloff…. coronavirus….
Shares of companies that help energy The price of bitcoin fell sharply, at Finance chiefs are reviewing
producers get oil and gas out of the one point losing more than 20% in currency-hedging strategies to
ground have become collateral damage less than an hour, a steep drop manage liquidity as widespread
in the global oil-price war. even for the notoriously volatile volatility spurred by the
asset. coronavirus pandemic spills.
Firms that own drilling rigs, manufacture
oil-field tools and manage the fleets of Bitcoin on dipped below US$6,000 The stress has put CFOs’ liquidity
pumper trucks that blast open shale for the first time since May. It rose plans to the test, and wild
wells are caught in the three-way battle to US$6,125 according to data from fluctuations in exchange rates
for market share between Saudi Arabia, CoinDesk, though it was still down mean companies with even
Russia and the North American oil about 20% for the day. minimal international operations
industry. The coronavirus pandemic’s could face significant currency
startling does not help. The speed and size of the selloff exposure.
caught even crypto traders-who are
Plunging oil prices portend a steep usually used to bitcoin’s wild The U.S. dollar has seen big
decline in drilling activity and dim swings-by surprise. swings amid the market upheaval
prospects for oil-patch contractors and tied to coronavirus fears and as
equipment suppliers. Investors, who The bitcoin plunge comes as the investors evaluate the outlook for
have suffered years of losses with oil- fast-spreading coronavirus upends global interest rates in the wake of
field-service stocks, are in full flight traditional markets such as stocks, a recent rate cut by the Federal
commodities and bonds Reserve.Wealth Management Digest │ April 2020 3
______________________________________________________________________________________
News Topics - Business
Saudi Arabia and Russia will add a flood of crude
Japan to quarantine visitors from China,
into already well supplied global energy markets.
South Korea….
The latest declines for oil came after Saudi
Japan introduced some of the strictest border
Arabian state oil giant Aramco said in a weekend
controls aimed at preventing the spread of the
statement to buyers that it was cutting most of its
new coronavirus, imposing a two-week
prices. Saudi officials said the kingdom also
quarantine on visitors from China or South
plans to boost crude output. The decision by the
Korea.
world’s key crude exporter could send prices
The decision effectively bars most travel to even lower after weeks of declines sparked by
Japan from the country’s close neighbours, who crumbling demand due to the coronavirus,
typically account for about half of all tourists to analysts say.
Japan.
U.S. crude futures opened down 16%, then
Japan also said it would ban visitor arrivals from extended declines to trade down nearly 30%
regions of South Korea and Iran worst affected before recently trading down 20% at US$33.19
by the virus and it said a planned April visit by a barrel.
Chinese President Xi Jinping would be
Brent crude, the global gauge of oil prices, was
postponed.
recently down 20% at US$36.12 a barrel.
As the virus spreads around the world, Analysts cautioned that the moves were likely to
governments are grappling with whether to shift due to thin trading volumes and notoriously
adopt tighter restrictions on people arriving from volatile crude prices.
foreign countries. The U.S. has banned foreign
The weeklong slide in oil underscores building
nationals coming from China and is instructing
anxiety among global investors that the
arrivals from Iran, Italy and South Korea to
economic fallout from the coronavirus will erode
observe a 14-day quarantine at home after they
global growth, sapping demand for a range of
enter the U.S.
raw materials from fuel to industrial metals.
China and South Korea have the largest number
The transportation sector has been hit
of reported cases of infection from the new
particularly hard by the virus, which has also
coronavirus, at more than 80,000 and more than
dragged down stocks and bond yields around
6,000, respectively.
the world.
Japan also has more than 300 confirmed cases
Coupled with those declines, oil’s precipitous fall
of infection from the virus across the country, not
in early 2020 is a signal to some traders that
counting those infected on a cruise ship docked
efforts by governments and central banks to
at Yokohama.
cushion the global economy from the virus might
Japan barred visitors from the two provinces in prove insufficient.
China worst hit by the virus.
The oil-price slide will likely result in lower fuel
The outright ban on arrivals from the worst- prices for consumers, but analysts say that the
affected regions of Iran and South Korea begins coronavirus’s dent to global travel will likely limit
Saturday. The government also said it would transportation activity and any economic benefit.
stop issuing visas at its embassies in China and Meanwhile, with natural-gas prices near
South Korea, and asked people from those multiyear lows, energy producers will be facing a
countries not to take public transport in Japan. fresh threat.
“Now is a critical time as the virus spreads The inability of Saudi Arabia and the rest of the
among affected countries,” Prime Minister Organization of the Petroleum Exporting
Shinzo Abe said at a meeting of the Countries and allies including Russia to reach a
government’s task force on the virus that deal to deepen existing production cuts sent
approved the measures. U.S. crude prices down 10% in their biggest one-
day slide since November 2014. Brent posted its
biggest drop since the financial crisis more than
Oil tumbles to new multiyear low as futures a decade ago.
trading opens….
Now, investors are weighing how low prices will
Oil prices fell sharply to new multiyear lows as fall. In addition to crude from Saudi Arabia and
futures trading reopened in New York, a signal Russia, analysts are concerned about U.S. shale
that traders fear an escalating clash between output, which has continued to increase steadilyWealth Management Digest │ April 2020 4
______________________________________________________________________________________
News Topics - Business
in recent years. Domestic output rose to a record complicates an inter-Korean pledge to build trust
13.1 million barrels. and tone down military tensions.
Mr. Kim started the year by announcing he no
longer felt bound by a self-imposed moratorium
North Korea fires projectiles….
on long-range weapons launches and nuclear
North Korea launched three short-range tests.
projectiles off its east coast, Seoul’s military said,
The absence of such testing, the Trump
in Pyongyang’s second weapons test in a week
administration says, is a sign the U.S. approach
after a period of inactivity.
to North Korea is working. But the two countries
South Korea’s military said the projectiles were have not held formal nuclear talks.
fired from the Sondok area of the North’s South
In a lengthy policy speech released, Mr. Kim also
Hamgyong province, a region where the Kim
said he would soon unveil a new strategic
Jong Un regime has conducted many of its
weapon, though he did not offer specifics.
launches.
North Korea conducted more than a dozen
They launched local time, soaring about 31 miles
weapons tests last year. Before the March
high, covering a distance of around 125 miles
launch, Pyongyang had not test-fired a missile.
and landing in the waters between South Korea
and Japan. The North’s resumption of short-range weapons
tests seek to strengthen Mr. Kim’s future
The weapons test comes just a week after the
negotiating hand with President Trump by
Kim regime launched what South Korean military
escalating tensions, said Jean H. Lee, director of
officials believe were two short-range ballistic
the Korea program at the Wilson Centre, a non-
missiles.
partisan think tank in Washington.
The launch appears connected to North Korea’s
“Kim hasn’t completely given up on negotiations
wintertime exercises that include test-fire and a
with Trump,” Ms. Lee said. “He’s lying low while
drill directed by Mr. Kim last month, Seoul’s
Trump puts the negotiations on hold to focus on
military said.
his re-election campaign.”
South Korea’s government expressed “strong
regret” over the latest launch, adding itWealth Management Digest │ April 2020 5
______________________________________________________________________________________
News Topics - Economy
countries. The epidemic has taken hold in some
Coronavirus epidemic exacerbates metals
of China’s biggest trading partners, including
glut….
South Korea and Japan.
The world was already awash in excess steel
“There’s a question whether these countries will
and aluminium. The new coronavirus
be able to sustain demand for Chinese
epidemic is deepening the pool.
products,” said Keith Tan, a senior editor for
China is the world’s top producer and consumer Platts in Singapore. Capital Economics recently
of steel and aluminium. With factories closed shaved its global GDP growth forecast for 2020
and the movement of people and freight to 1.8% from 2% as a result of the epidemic.
restricted to slow the spread of the new
coronavirus, China’s demand for those metals
has plummeted. Virus clouds China’s prospects to meet U.S.
trade commitments….
But many of the country’s steel mills and
aluminium smelters have continued to operate The spread of the coronavirus and related
because stopping and starting equipment economic uncertainty is threatening to
handling molten metal is expensive and risky. undermine the “phase one” trade agreement that
the Trump administration signed with its Chinese
Millions of tons of steel and aluminium produced
counterparts less than two months ago.
during what is now the worst manufacturing
slump on record in China have created a surplus President Trump, who repeatedly has criticized
of metal that will take months to shrink, even if the U.S. trade deficit with China, made purchase
the epidemic is contained and demand recovers commitments by China a core part of the deal,
later this year in China and beyond. with Beijing expected to buy US$200 billion in
additional American exports over two years.
As a result, the global stockpile of steel and
aluminium threatens to push down prices and An extra US$77 billion is required in 2020 and
put new pressure on producers in the U.S., US$123 billion in 2021.
Western Europe and elsewhere.
Yet, the virus’s spread has hurt Chinese
Many of those companies were already economic demand and trade, and the ensuing
struggling to earn a profit on steel and aluminium drop in global-energy prices and weakness in
because of lower prices and weakening demand the transportation sector make it extremely
from manufacturers. unlikely China will be able to make good on the
dollar commitments in the deal, economists and
U.S. imports of steel and aluminium from China
trade experts say.
have fallen significantly in recent years. Steel
imports from China sank 22% last year from the The Centre for Strategic and International
year before to about 544,000 tons, according to Studies released a report saying that the
the Census Bureau and the American Iron and purchase targets already were overly ambitious
Steel Institute. Overall, steel imports last year fell - and that the coronavirus has only worsened the
by 17%. situation.
Aluminium inventories in China increased by Trump administration officials previously
62% to 1.4 million metric tons since the start of acknowledged that the coronavirus-related
February, according to market consulting firm problems may delay expected purchases by
CRU Group. Inventories of finished steel at mills China this year, but said Chinese President Xi
in China were 45% higher than the same time a Jinping had assured Mr. Trump the country
year ago, according to the China Iron & Steel would meet its obligations.
Association trade group.
Trade experts have pointed to a clause in the
With demand inside China still in the doldrums, deal that allows for consultations “in the event
steelmakers have an incentive to export. Platts that a natural disaster or other unforeseeable
said large shipments of construction-reinforcing event outside the control” of the countries delays
bar from China recently turned up in Singapore implementation.
and Hong Kong and said Chinese sheet steel is
Mr. Trump has been generally complimentary of
being offered at discounted prices in Vietnam.
China’s handling of the crisis, a characterization
The world’s ability to absorb such shipments that is at odds with some fellow Republicans,
from China is strained by weakening industrial
activity and the spread of coronavirus in otherWealth Management Digest │ April 2020 6
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News Topics - Economy
who have questioned whether China has been “Today will be a regretful day,” Saudi energy
transparent. minister Abdulaziz bin Salman told the
gathering, according to people who were
A Republican with close ties to the
present, after Russian delegates insisted they
administration believes Mr. Trump is proceeding
would not debate further action before the
carefully to avoid giving Beijing an excuse to
group’s next scheduled meeting in June.
back out of its commitments. “He thinks that if he
starts beating up China they are going to stiff The splintering of OPEC+ exposes stark
him,” this person said. The White House did not differences in the importance of oil in Russia and
immediately respond to a request for comment. Saudi Arabia. Russia’s economy is more
diversified and it does not suffer as much as the
Current and former administration officials have
Saudi kingdom when oil prices hover around
tended to be optimistic about Beijing’s ability to
US$50 a barrel.
catch up on the requirements of the pact, noting
that Mr. Xi has enormous influence over state- In addition, Moscow’s oil sales to China have not
owned enterprises that could purchase suffered as much those of other producers. The
American aircraft, energy products and farm Asian giant has continued to buy large quantities
goods. of Russia’s cheaper product for storage.
China posted a 4% drop in imports in the first two Unlike Saudi Arabia, Moscow favours not cutting
months of the year, compared with a year earlier. supply and allowing cheap prices to stir demand,
Still, the country’s pork, soybean and natural-gas which could be compared to the economic path
imports grew. taken by the Chinese government in recent
weeks, OPEC delegates said.
From the start of the collaboration, former Saudi
Oil prices plunge after Russia-Saudi split….
Energy Minister Khalid al-Falih often negotiated
Crude prices logged their worst day since the oil-production pacts with his Russian
financial crisis after two of the world’s biggest oil counterpart, Alexander Novak, ahead of OPEC+
producers failed to agree on whether to reduce meetings.
global supply in the face of the coronavirus
The OPEC’s ministers agreed to production cuts
devastating effect on demand.
of 1 million barrels a day through the end of this
Brent crude, the global benchmark, notched its year, to be shared among its 13 member nations.
largest one-day percentage decline, falling 9.4% The proposal also called for another 500,000
to US$45.27. U.S. crude futures declined 10.1% barrels of daily cuts to be divided among the
to US$41.28 a barrel, their largest one-day cartel’s 10 Russia-led oil-producing allies.
percentage decline.
The coronavirus epidemic is expected to
“It’s a disaster,” said Robert Yawger, director of diminish global crude demand by as much as
the futures division at Mizuho Securities USA. US$2.1 million barrels a day in the first half of
“What happened was really a worst-case 2020, according to an estimate from Goldman
scenario situation.” Sachs, HIS Markit and Standard
Chartered forecast a decline in demand for
Saudi Arabia was unable to persuade Russia to 2020’s first two quarters by around US$2 million
join its plan for deeper crude production cuts at
barrels a day from the same period a year
a gathering of the Organization of the Petroleum
earlier.
Exporting Countries and its allies in Vienna.
The failure signalled the end of a four-year
collaboration between OPEC’s member-nations
and 10 non-members led by Russia, which
collectively was known as OPEC+.Wealth Management Digest │ April 2020 7
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News Topics - Economy
“What we’ve seen is dislocation and
Market turmoil cascades through
dysfunctional markets consistent with fear and
currencies….
uncertainty,” said Su-Lin Ong, head of
Foreign-exchange markets convulsed, as steep economics at RBC Capital Markets in Sydney.
drops in oil and stock prices sparked a flight from
The yen has also been buoyed by the Fed’s
commodity-linked currencies into the perceived
moves to cut U.S. interest rates, reducing the
safety of the yen and Swiss franc.
gap between U.S. borrowing costs and those in
The Russian ruble was among the biggest Japan, which already has ultralow and, in some
losers, plunging 8% against the dollar in its worst cases, negative interest rates.
one-day performance since the height of the
Ryutaro Kono, a Tokyo-based economist at BNP
U.S. sanctions-led crisis.
Paribas, said the yen’s strength was troubling for
Saudi Arabia’s decision over the weekend to the Fed’s counterparts at the Bank of Japan.
instigate an oil-price war as it escalated its clash
with Russia sent crude prices down by the most
since the Gulf War, and threatened to sharply Repos drive outstanding U.S. Fed liquidity to
erode revenue for oil exporters, including US$233.6 billion….
Russia.
Temporary liquidity provided by the Federal
Meanwhile, the WSJ Dollar Index, which tracks Reserve Bank of New York increased sharply
the dollar against a basket of major currencies, and approached peak levels seen at the start of
dropped 0.6% in its biggest decline. the year.
The dollar has come under pressure in recent The FED intervened in financial markets with two
days as investors assess the outlook for global repurchase agreement operations or repos. The
interest rates amid rising bets that the Federal overnight repo, which has a cap of US$150
Reserve may pare borrowing costs again, billion, saw eligible banks draw US$123.63
reducing what investors will earn for holding billion from the central bank.
dollar assets.
The FED’s 14-day repo saw very high demand:
The yen and Swiss franc, on the other hand, Banks sought US$93 billion and got US$45
posted gains as investors looked for safe-haven billion, the most allowed.
assets amid the sweeping market turmoil of
The size of repos caused the overall amount of
recent weeks.
temporary liquidity offered by the FED to rise by
The rate cut by the FED, as well as its decision US$30.7 billion to US$233.6 billion. That is
to keep short-term funding markets operating by closing in on US$255.62 billion, the peak of FED
injecting funds, fuelled speculation about the repos.
depth of policy makers’ concerns regarding an
The strong demand for central-bank liquidity
economic slowdown, investors said, adding to
comes amid deeply unsettled markets and
the volatility in currency markets.
massive demand for U.S. Treasury securities, as
“We’ve seen waves of headlines creating an worries mount about what the coronavirus
atmosphere of panic in markets,” said Jane outbreak might mean for the global economy.
Foley, head of foreign exchange strategy at That has helped contribute to pressure in
Rabobank. money-market rates and has driven up demand
for cash from the FED.
The Federal Reserve Bank of New York’s offer
of US$150 billion in overnight lending is “a huge The FED responded to the broader market
step up in intervention in money markets,” she stress by increasing the size of its repo
said. operations.
The Australian dollar, which briefly fell during It did so to ensure that short-term rate volatility is
Asian trading hours by as much as 4.9% against limited and that it retains firm control over the
the U.S. currency, closed the day 0.8% lower. Federal-funds rate target range, the tool it uses
to achieve its inflation and job mandates.
Meanwhile, the yen jumped to trade just above
102 per U.S. dollar, its strongest point.Wealth Management Digest │ April 2020 8 ______________________________________________________________________________________ News Topics - Geopolitical The increased size of operations happened even as there was no sign of major stress in money markets. FED repo operations take in Treasury, mortgage and agency securities in what is effectively a loan to banks, collateralized by the bonds. The FED has used repos for decades to influence short-term rates. It took a decade off in the wake of the financial crisis, and restarted the buying when reserves in the banking system ran low and unsettled FED control of its interest-rate target. FED repos are supposed to wind down after April, but many now think they will run on longer. There is also uncertainty about the FED’s Treasury bill buying given widespread expectations that the coronavirus’s spread will soon cause the Fed to lower its rate target to near zero and once again turn to Treasury buying as a form of stimulus.
Wealth Management Digest │ April 2020 9
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Economic Events - Graphs
United States: Home prices grew 3.1% on an annual Eurozone: Economic sentiment dives at sharpest
basis in January, up for a revised 2.8% in December pace on record in March plunging to 94.5 points from
(previously reported: +2.9% year-on-year) and February’s 103.4 points
marking a one year high
Note: The Economic Sentiment Indicator (ESI) is based on
Note: S&P/Case-Shiller Composite-20 home price value index surveys addressed to the manufacturing, services, retail trade
and month-on-month non-seasonally adjusted variation. and construction sectors, as well as to consumers. Values
Source: Standard & Poor’s. above 100 indicate an above-average economic sentiment,
United States: consumer confidence index fell to whereas values below 100 indicate a below-average position.
120.0 in March from February’s revised six-month Source: European Commission
high of 132.6 but was better than market Germany: Consumer confidence to be hard-hit by
expectations of a sharper fall to 110.0. coronavirus pandemic in April
Note: Consumer Confidence Index. Note: GfK Consumer Climate Index.
Source: The Conference Board. Source: The GfK Group.
United Kingdom: The IHS Markit/CIPS UK services China: Industrial production nosedives at the start of
Purchasing Managers’ Index (PMI) fell from 53.2 in the year due to Covid-19 outbreak
February to 35.7 in March. The manufacturing PMI
was down from 51.7 to 48.0.
Note: Year-on-year variation of industrial production
index and annual average growth rate in %. Owing to
Note: Markit/CIPS United Kingdom Purchasing Managers’
seasonal factors related to the Lunar New Year, annual
Index (PMI). Readings above 50 indicate an overall increase
compared to the previous month, and below 50 an overall figures in January and February are reported together.
decrease. Source: National Bureau of Statistics of China (NBS)
Source: IHS Markit and CIPS. and FocusEconomics calculationsWealth Management Digest │ April 2020 10
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Economic Events - Graphs
Malaysia: Industrial production moderates in Singapore: Non-oil exports recover in February
January edging down to 0.6% in annual terms expanding 3.0% year-on-year, but outlook clouded
by the coronavirus
Note: Annual changes of industrial production index and annual
average growth rate in %. Note: Year-on-year and seasonally-adjusted month-on-month
Source: Department of Statistics Malaysia (DSM). variation of non-oil domestic exports in %.
Source: Statistics Singapore (Singstat) and International
Malaysia: Inflation softens to 1.3% in February from Enterprise (IE) Singapore and FocusEconomics calculations.
1.6% in January
Indonesia: Retail sales decline in January, further fall
expected in February
Note: Annual and monthly variation of consumer price index in
%.
Source: Department of Statistics Malaysia (DSM). Note: Year-on-year and annual average variation in %.
Source: Bank Indonesia (BI) and FocusEconomics
Singapore: Economy contracts 2.2% year-on-year in calculations.
Q1 2020 due to Covid-19 outbreak
Thailand: Manufacturing output drops for ninth
consecutive month in January dropping 4.6% year-
on-year
Note: Quarter-on-quarter changes of seasonally adjusted
annualized GDP and year-on-year variation in %.
Source: Ministry of Trade and Industry (MTI) and
FocusEconomics Consensus Forecast. Note: Year-on-year changes and annual average variation of
manufacturing production index in %.
Source: Office of Industrial Economics (OIE) and
FocusEconomics calculations.Wealth Management Digest │ April 2020 11 ______________________________________________________________________________________ Economic Events - Graphs Philippines: Manufacturing PMI hits over one-year high in February rising to 52.3 in February from 52.1 in January Note: Philippines Manufacturing Purchasing Managers’ Index. Readings above 50 indicate an overall increase compared to the previous month while readings below 50 indicate an overall decrease. Source: IHS Markit.
Wealth Management Digest │ April 2020 12
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Equity Market Performance
Key Indices Performance as at 31 March 2020
1- 6-
Index YTD 1-Year 3-Years
Equity Indices Month Months P/E (X)
Value (%) (%) (%)
(%) (%)
World
MSCI AC World Index (USD) 442.35 (21.7) (13.7) (15.0) (13.0) (1.5) *17.6
U.S.
US Dow Jones Industrial Average 21917.16 (23.2) (13.7) (18.6) (15.5) 6.1 15.9
US S&P 500 Index 2584.59 (20.0) (12.5) (13.2) (8.8) 9.4 18.2
US NASDAQ Composite Index 7700.10 (14.2) (10.1) (3.7) (0.4) 30.3 22.1
Europe & Japan
MSCI AC Europe (USD) 362.93 (25.3) (15.0) (18.8) (18.2) (14.8) *14.4
Euro STOXX 600 Index 320.06 (23.0) (14.8) (18.6) (15.6) (16.0) 14.2
UK FTSE 100 Index 5671.96 (24.8) (13.8) (23.4) (22.1) (22.5) 13.2
Germany DAX Index 9935.84 (25.0) (16.4) (20.1) (13.8) (19.3) 14.3
France CAC-40 Index 4396.12 (26.5) (17.2) (22.6) (17.8) (14.2) 14.2
Japan Nikkei-225 Stock Average 18917.01 (20.0) (10.5) (13.0) (10.8) 0.0 15.8
Asia Pacific
MSCI AC Asia Pacific ex Japan (USD) 436.33 (21.1) (14.3) (13.1) (17.6) (9.0) *15.3
Australian Stock Exchange 200 Index 5076.80 (24.0) (21.2) (24.1) (17.9) (13.4) 13.7
Hong Kong Hang Seng Index 23603.48 (16.3) (9.7) (9.5) (18.8) (2.1) 9.8
Hang Seng China Enterprises Index 9594.77 (14.1) (6.9) (5.9) (15.7) (6.6) 7.8
Taiwan TAIEX Index 9708.06 (19.1) (14.0) (10.4) (8.8) (1.1) 14.4
Korea KOSPI Index 1754.64 (20.2) (11.7) (14.9) (18.0) (18.8) **-
Indonesia Jakarta Composite Index 4538.93 (27.9) (16.8) (26.4) (29.8) (18.5) 11.2
Malaysia FBM KL Composite Index 1350.89 (15.0) (8.9) (14.7) (17.8) (22.4) 15.0
Philippines PSE Index 5321.23 (31.9) (21.6) (31.6) (32.8) (27.2) 11.7
Singapore FTSE Straits Times Index 2481.23 (23.0) (17.6) (20.5) (22.8) (21.9) 9.6
Thailand SET Index 1125.86 (28.7) (16.0) (31.2) (31.3) (28.5) 11.8
BRIC
Russia MICEX Index 2508.81 (17.6) (9.9) (8.7) 0.5 25.7 5.3
Brazil Bovespa Index 73019.76 (36.9) (29.9) (30.3) (23.5) 12.4 10.3
India SENSEX 30 Index 29468.49 (28.6) (23.1) (23.8) (23.8) (0.5) 16.1
China Shanghai Composite Index 2821.35 (7.5) (2.0) (2.9) (8.7) (12.4) 10.7
Source: Thomson Reuters Datastream
*MSCI P/E Source: MSCI Website Data as at 28 February 2020
**Korea’s KOSPI Index P/E no longer provided by Thomson ReutersWealth Management Digest │ April 2020 13
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Fixed Income Market Performance
Global Government Bond Yields as at the End of Each Quarter
Government Bond Yields Mar 2020 Dec 2019 Sep 2019 Jun 2019
US Treasury Yields (%)
3-Month 0.1 1.6 1.8 2.1
2-Year 0.2 1.6 1.6 1.7
5-Year 0.4 1.7 1.6 1.8
10-Year 0.7 1.9 1.7 2.0
30-Year 1.4 2.4 2.1 2.5
Developed markets 10-year bond yields (%)
Japan 0.0 (0.0) (0.2) (0.2)
UK 0.4 0.8 0.5 0.8
Germany (0.5) (0.2) (0.6) (0.3)
France (0.0) 0.1 (0.3) (0.0)
Italy 1.5 1.4 0.8 2.1
Spain 0.7 0.5 0.1 0.4
Emerging markets 10-year bond yields (%)
Malaysia 3.4 3.3 3.3 3.6
Thailand 1.5 1.5 1.5 2.2
Indonesia 6.1 6.6 6.7 6.9
Singapore 1.3 1.7 1.7 2.0
China 2.7 3.2 3.2 3.3
S Korea 1.6 1.7 1.5 1.6
Australia 0.8 1.4 1.0 1.3
Source: Thomson Reuters Datastream
Bond Indices Performance as at 31 March 2020
YTD 1-Month 6-Month 1-Year 3-Years
Bond Indices Index Value
(%) (%) (%) (%) (%)
Barclays Asian Pacific Aggregate Bond Index 152.80 (0.8) (2.0) (1.2) 1.9 6.2
Barclays Global Aggregate Bond Index 510.00 (0.3) (2.2) 0.2 4.2 11.0
Barclays Global High Yield Index 1202.08 (15.0) (13.5) (12.0) (10.0) (1.8)
Source: Thomson Reuters DatastreamWealth Management Digest │ April 2020 14
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Alternative Investment - Market Performance & Prices
Alternative Investments Data as at 31 March 2020
Index YTD 1-Month 6-Month 1-Year 3-Years
Commodity Unit Exchange
Value (%) (%) (%) (%) (%)
S&P GSCI Commodity
- - 1494.34 (42.3) (29.4) (37.6) (41.0) (34.9)
Index TR
Reuters/Jefferies CRB
- - 121.79 (34.4) (23.6) (30.0) (33.7) (34.5)
Index TR
Gold US$/troy oz COMEX 1583.40 4.2 1.2 8.0 22.5 26.9
Silver USc/troy oz COMEX 14.10 (20.9) (14.0) (16.6) (6.4) (22.7)
Copper USc/lb COMEX 2.24 (19.8) (12.0) (12.7) (23.7) (15.4)
WTI Crude Oil US$/bbl NYMEX 20.48 (66.5) (54.2) (62.1) (65.9) (59.5)
Brent Crude US$/bbl ICE 22.74 (65.5) (55.0) (62.6) (66.7) (57.0)
Crude Palm Oil RM/ton MDEX 2550.00 (16.1) 8.2 22.7 27.4 (10.0)
Source: Thomson Reuters DatastreamWealth Management Digest │ April 2020 15
______________________________________________________________________________________
Forex Performance Table
Periodic Performance (%) of the USD and MYR against Major Currencies as at 31 March 2020
Performance (%) of the USD against Major Currencies as at 31 March 2020
AUD / CAD / CNY / EUR / CHF / INR / JPY / MYR / SGD / GBP /
USD USD USD USD USD USD USD USD USD USD
1 Month 6.6 5.5 1.7 0.9 0.2 3.4 (0.7) 2.7 2.3 2.7
2 Months 9.1 6.2 2.1 0.6 (0.2) 5.3 (0.8) 5.3 4.2 6.3
3 Months 14.4 8.3 1.7 1.7 (0.7) 5.6 (1.0) 5.5 5.7 6.9
6 Months 10.0 6.2 (0.9) (1.2) (3.7) 6.6 (0.5) 3.1 2.9 (1.0)
1 Year 15.9 5.7 5.5 1.7 (3.8) 8.9 (3.4) 5.7 5.0 5.5
2 Years 24.9 8.9 12.8 11.5 0.6 15.7 1.6 11.7 8.3 13.1
3 Years 24.3 5.6 2.9 (3.4) (4.2) 16.2 (3.5) (2.5) 1.8 1.1
5 Years 24.0 10.8 14.2 (2.7) (1.2) 21.0 (10.5) 16.5 3.6 19.3
Source: Thomson Reuters Datastream
Performance (%) of the MYR against Major Currencies as at 31 March 2020
AUD / CAD / CNY / EUR / CHF / INR / JPY / USD / SGD / GBP /
MYR MYR MYR MYR MYR MYR MYR MYR MYR MYR
1 Month 3.8 2.8 (0.9) (1.7) (2.5) 0.6 (3.3) (2.6) (0.4) (0.0)
2 Months 3.5 0.8 (3.1) (4.6) (5.3) (0.1) (5.9) (5.1) (1.2) 0.9
3 Months 8.5 2.6 (3.6) (3.7) (5.9) 0.1 (6.2) (5.2) 0.2 1.3
6 Months 6.7 3.0 (3.9) (4.1) (6.6) 3.5 (3.5) (3.0) (0.2) (4.0)
1 Year 9.6 (0.1) (0.3) (3.9) (9.1) 2.9 (8.7) (5.5) (0.8) (0.3)
2 Years 11.8 (2.6) 0.9 (0.2) (10.0) 3.5 (9.1) (10.5) (3.1) 1.2
3 Years 27.5 8.3 5.5 (1.0) (1.8) 19.1 (1.0) 2.5 4.3 3.6
5 Years 6.4 (4.9) (2.0) (16.5) (15.2) 3.8 (23.2) (14.2) (11.1) 2.4
Source: Thomson Reuters DatastreamWealth Management Digest │ April 2020 16
______________________________________________________________________________________
Asset Allocation Strategy
Asset Class Review and Outlook
Investment
Equity View Remark
GDP growth in 2020 is more optimistic on the back of better consumer sentiments and the Phase 1 deal of to
US-China trade tension. Equities valuations are high but little likely to be supported due to limited negative
US Positive catalysts. Unlikely to see a Fed Fund rate cut unless economic data unexpectedly & materially weakens.
Eurozone stocks generally has cheaper valuations than US stocks. Upside may also come from ECB's more
Eurozone Positive easing monetary measures.
UK stocks valuation are cheap relative to the global markets, as geopolitical uncertainty has been priced into
UK Positive equities.
Potential upside in equities following anticipated recovery in corporate earnings and more positive sentiments
Japan Positive following the 'Phase 1' deal in the US-China trade tensions.
Global
Emerging EM equities may benefit if the US-China tension sees less volatility in 2020 and US maintain easing monetary
Markets Neutral policies. However, a weaker-than-expected GDP growth in China, would see investors risk-off in EM equities.
In China, while concerns over slowing growth is weighing down investment appetite, policy stimulus should
improves growth outlook and supports valuation. More stability in GDP growth expected in 2020, targeting
5.8% - 6% for 2020. Negative earnings revisions in China 2019 may also be bottoming, presenting a more
China Neutral stable equity market in 2020.
Relatively shielded from trade war thanks to a large domestic economy. However, sustained high oil price
may widen the current account deficit, impacting GDP growth and raises the currency depreciation risk.
India Neutral Coupled with richer valuation relative to peers, upside could be limited.
Commodities prices are expected to be neutral to mildly bullish, while corporate earnings quality is still better
than average, and corporate balance sheets are strong. Upside on equity market is anticipated, but is still
Australia Neutral subject to any commodity price volatility in 2020.
South Valuations is low but lack of catalyst:- uncertainties over US-China trade war, Korea-Japan trade conflict,
Korea Neutral earnings downturn especially from the cyclical sectors.
Bearish outlook on semicon and Apple supply chain, ongoing trade issues. Highly exposed to trade tensions.
30% of mostly Taiwanese manufacturing activities are still based in China. But supported by good dividend
Taiwan Neutral yield.
A good and balance formation of new cabinet by Jokowi (55% technocrat/professional). Expectation of
continuous good growth after election. Relatively stronger domestic demand. On the downside, flip-flopping
Indonesia Neutral policies and exhausted government spending after election, may cap the growth.
Source: AmInvest as of Apr 2020Wealth Management Digest │ April 2020 17
______________________________________________________________________________________
Fund Focus
Geographical / Sector Equity Mixed Asset / Fixed Income
Developed Market Aberdeen Islamic World Equity Fund Affin Hwang World Series-Global
Balanced
United Global Quality Equity MYR
Hedged Global Multi-Asset Income*
RHB US Focus Equity
Eastspring Investments Global
RHB European Select* Target Income
Europe Equity Growth*
United Japan Discovery Fund*
Emerging Market Eastspring Investments Global Emerging Affin Hwang Select Income
Markets
RHB Asian Income MYR
Affin Hwang Select Asia (ex Japan)
Opportunity Affin Hwang Select Bond
CIMB Islamic Asia Pacific Equity
CIMB Principal Asia Pacific Dynamic
Income
TA South East Asia Equity
Local Affin Hwang Select Opportunity Affin Hwang Select Balanced
Eastspring Investments Equity Income CIMB Islamic Balanced
Eastspring Investments Small-Cap
Eastspring Investments Bond
Ambon Islam
Single country, sector RHB Big Cap China Enterprise Affin Hwang Select SGD Income
or strategy
Eastspring Investments Asia
AmChina A-Share (Wholesale Fund)
Select Income
CIMB Principal China-India-Indonesia
TA Global Technology N/A
Source: AmBank as of Apr 2020Wealth Management Digest │ April 2020 18
______________________________________________________________________________________
Fund Focus
Reference Portfolio
Reference Portfolio (Based on Investor's Risk Profile)
(% Allocation for Equity and Fixed Income)
100
90 25
40
80
70
70
60
90
100
50
40 75
60
30
20
30
10
10
0
Very Conservative Conservative Moderate Growth Aggressive
Fixed Income Equity
Source: AmBank as of July 2018Wealth Management Digest │ April 2020 19
______________________________________________________________________________________
Fund Performance Table
Top Performing Funds
Rank 1-month % 3-months % 6-months % 1-year %
TA Global
RHB Big Cap 14.3 AmChina A-
First Technology 3.64 AmIncome 0.88 14.48
China Enterprise 4 Shares
Fund
RHB Big Cap
AmIncome AmChina A- 12.2 TA Global
Second China 3.41 0.54 12.58
Plus Shares 9 Technology Fund
Enterprise
Aberdeen
Standard
AmChina A- TA Global 11.3
Third Islamic 2.28 (0.09) 12.46
Shares Technology Fund 2
World Equity RHB Gold and
Fund - Class General
CIMB-Principal
Global AmDynamic Precious Metals
Fourth 1.88 (0.85) Greater China 6.35 9.86
Agribusiness Sukuk - Class A Securities
Equity Fund
Eastspring
AmIslamic AmPan European
Fifth 0.82 AmBond (0.88) Investments 5.82 9.43
Growth Property Equities
Dinasti Equity
Bottom Performing Funds
Rank 1-month % 3-months % 6-months % 1-year %
AmAsia RHB Small
RHB Small Cap RHB Small Cap
Pacific REITs Cap
First (15.04) (28.21) Opportunity (27.45) Opportunity (33.35)
- Class B Opportunity
Unit Trust Unit Trust
(MYR) Unit Trust
RHB
AmAsia RHB Emerging RHB Emerging
Emerging
Second Pacific REITs (13.84) (26.26) Opportunity (25.80) Opportunity (30.64)
Opportunity
Plus Unit Trust Unit Trust
Unit Trust
RHB Small
RHB US
Cap RHB Smart
Third (13.75) Focus (25.74) (22.55) (21.67)
Opportunity United ASEAN Treasure
Equity
Unit Trust Discovery Fund
United
RHB
Japan RHB Growth &
Emerging RHB Smart
Fourth (11.83) Discovery (23.88) (18.70) Income Focus (21.10)
Opportunity Treasure
Fund MYR Trust
Unit Trust
Hedged
United
RHB Asian United Japan United Japan
ASEAN
Fifth High Yield (11.63) (22.94) Discovery Fund (17.76) Discovery Fund (20.84)
Discovery
Fund - MYR MYR Hedged MYR Hedged
Fund
Sources: Performance report dated 10 Apr 2020 by Novagni Analytics & Advisory Sdn Bhd
All the above funds are distributed by AmBank.Wealth Management Digest │ July 2018 20
______________________________________________________________________________________
Definitions
% Percentage
Currency Pair of AAA and BBB. Number of units of AAA (Base currency) that one unit of
AAA/BBB
BBB (Quote currency) will buy.
AUD Australian Dollar
Bosvepa Brazil Stock Index
CAD Canadian Dollar
CHF Swiss Franc
CNY Chinese Renminbi
CPI Consumer Price Index
DAX German Stock Index
DJIA Dow Jones Industrial Average
EPFR Global Emerging Portfolio Fund Research, Inc.
ETF Exchange Traded Funds
EUR Euro
FocusEconomics is a leading provider of economic analysis and forecasts for 127
FocusEconomics countries in Africa, Asia, Europe and the Americas, as well as price forecasts for 33 key
commodities.
GBP UK Pound Sterling
GDP Gross Domestic Product
German IFO German Information and Forschung (research).
HSI Hong Kong’s Hang Seng Index
IIF Institute of International Finance
Information Handling Services is a company based in London, United Kingdom. IHS
IHS provides information and analysis to support the decision-making process of
businesses and governments.
IHS Markit A merger between IHS and Markit Ltd.
Indonesia's JSX Indonesia's Jakarta Stock Exchange
I/B/E/S 'Institutional Brokers' Estimate System
INR Indian Rupee
JPY Japanese Yen
KOSPI South Korea's Stock Index
Malaysia’s KLCI FTSE Bursa Malaysia Index
A global financial information and services company founded in 2003 as an
Markit Ltd
independent source of credit derivative pricing.
MICEX Russian Stock Index
MYR Malaysian Ringgit
Philippines PSE Philippines' Stock Index
PSEi The Philippine Stock Exchange, Inc
PMI Purchasing Managers' Index
PRC People's Republic of China
Q1,Q2,Q3,Q4 Quarter 1, Quarter 2, Quarter 3, Quarter 4
SCI China's Shanghai Composite Index
SGD Singapore Dollar
Singapore STI Singapore's Strait Times Index
TAIEX Taiwan's Stock Index
Thailand’s SET Thailand's Stock Index
U.K. United KingdomWealth Management Digest │ April 2020 21 ______________________________________________________________________________________ Definitions U.S. United States of America U.S. Fed United States Federal Reserve USD U.S. Dollar YOY Year-on-year YTD / y-t-d Year to date
Wealth Management Digest │ April 2020 22
______________________________________________________________________________________
Disclaimer
Important Information for Customers:
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The information, statement and/or descriptions contained in this report has been prepared strictly as general information for
quick reference and illustration purposes only and is not intended to be the complete description of any products mentioned
or as an offer to sell or a solicitation to buy any securities, foreign exchange or other product. In providing this report AmBank
is not making any recommendation to buy any securities or other product and the information provided should not be taken
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who receive it. AmBank has no obligation to update its opinion or the information in this report and you should independently
evaluate particular investments and strategies and seek the advice of a financial adviser prior to entering into any transaction.
The information herein was obtained or derived from sources that AmBank believes are reliable, but while all reasonable care
has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we make no representation or
warranties, express or implied, as to the accuracy or completeness of the information herein and expressly disclaims any liability
for any loss (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) that you or
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Members of the AmBank Group, AmBank Group affiliates and each of their directors, officers employees and agents (“Relevant
Persons”) may provide services to any company and affiliates of such companies whose securities or other products are
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Persons may provide or may seek investment banking or other services to or from the companies in which have an interest in
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