Despite the broader market sentiment turning
weaker as the FBMKLCI Index lost 1.59% over the week, all our three portfolios
extended their previous week’s gains as MPHB and GAB rose higher due likely to
their dividend payments, which went ex-entitlement last week for MPHB while GAB
is due this week. The local market turned bearish in the middle of last week
after two weeks of good gains as GE13 draws closer. As such, investor switched
their focus to stocks with dividend payments that were due to go
ex-entitlement. The DIVIDEND YIELD Portfolio (+1.93% WoW) led the gains last
week followed by the THEMATIC (+0.73 WoW) and GROWTH (+0.66%) Portfolios. The
THEMATIC Portfolio (+3.40% total YTD unrealised profit) was the first portfolio
to turn into black in the previous week after six weeks of losses. This was
followed by the DIVIDEND YIELD and GROWTH Portfolios, which also turned to
positive gains last Friday with total YTD unrealised returns of +1.00% and
+0.97% respectively (vs. the benchmark index’s total YTD loss of -3.39%).
Technically, the FBMKLCI has shown signed of weakening and small-cap stocks are
likely to retrace for the coming weeks as well (please read our Weekly
Technical Report for details).
Sentiment turns bearish. The local market reversed its
2-week gains after the FBMKLCI hit its 2-month high of 1,664 last Tuesday as
investors locked in the previous week’s gains on UMW (-RM0.92) and BAT
(-RM6.22) while banking heavyweights such as CIMB (-RM0.20), MAYBANK (-RM0.20)
and PBBANK (-RM0.21) also saw selling pressure. However, buying interests in
GAB (+RM1.48) and MPHB (+RM0.24) before their stocks went ex-entitlement for
dividend last Thursday (14 Mar) and due today (18 Mar) lifted their share
prices. The FBMKLCI index meanwhile declined 26.32pts or 1.59% WoW to close at
1,627.64. On the US market, the Dow continued its uptrend as encouraging
economic data helped push banking stocks higher. This week, the key event to
watch is on Thursday, where the largest non-Petronas oil & gas company,
SKPETRO is expected to release its full-year FY13 merged results after the
merger between SapuraCrest and Kencana Petroleum in May last year. We expect
its FY13 net profit to be in line with our projection of RM496m. Meanwhile,
technical indicators such as the FBMKLCI RSI and Stochastic indicators suggest
that there will be further losses for the market in the coming days, although
there could be some selective buying in heavyweights such as GENTING, UEMLAND
and possibly in telco companies.
DIVIDEND YIELD Portfolio leads the gains. Following the THEMATIC Portfolio
which turned back into the black in the previous week, the DIVIDEND YIELD and
GROWTH Portfolios were also profitable again last week despite the FBMKLCI
extending its losses. The DIVIDEND YIELD Portfolio posted the largest WoW gain
of 1.93% (RM1,284), reversing its previous loss to record a gain of +1.00%
(RM665) in total YTD unrealised profit, thanks largely to GAB as the stock
soared 8.6% or RM1.48 WoW. MPHB, which jumped RM0.24 (+6.7%) WoW, helped to
extend the THEMATIC Portfolio’s gain by +0.73% or RM611 to record a total YTD
unrealised gain of +3.40% or RM2,836, while the GROWTH Portfolio posted a
+0.66% or RM435 gain, turning the portfolio from a loss to a total YTD
unrealised profit of RM639 or +0.97%. In contrast, the benchmark index registered
a -1.59% loss last week, widening its total YTD loss to 3.39%.
Dividend payment counters in the limelight. PUNCAK dropped slightly by RM0.02
or 1.30% WoW after an impressing 4-week run. As such, it contributed RM160 or
-1.30% in fund value loss for the THEMATIC Portfolio. However, the stock still
made a total impressive gain of RM2,640 or 27.73% to the portfolio. As
investors were looking for dividend payment stocks, GAB was the main gainer
last week and it contributed RM1,184 or a +9.02% gain to the invested fund for
the DIVIDEND YIELD Portfolio, bringing its total YTD unrealised gain to RM1,824
or 13.90%. Likewise, MPHB contributed RM956 in gains or +6.87% to our THEMATIC
Portfolio for a total of RM1,600 (+12.05%) in YTD unrealised profits.
Market expected to be volatile. Besides MPHB, the shares of TOMYPAK
also went exentitlement for dividend last Thursday. Although we had called for
a Take Profit action on the stock in our On Our Radar report on 7 Mar, we have
decided to keep our positions on the stock in the DIVIDEND YIELD (15,000
shares) and GROWTH (18,750 shares) portfolios for now. All in, the local market
is expected to be volatile given the GE jitters. The news and progress of the
election will lead the market direction in the next few months. Our house view
of a “buy on weakness” at 1,610 and a “sell on strength” at 1,710 remains.
Source: Kenanga
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