What's Trending?

After an intense week, the geopolitical tension that was stoked by the drone attack on Iran de-escalated, and left room for global equity markets to continue its climb. Investors’ sentiment toward risk assets also improved on optimism on the US-China trade deal. However, weaker than expected US job data caused a bump in the road, putting some pressure on the equity markets.

 

Geopolitical happenings

  • Iran retaliated on US’ drone attack which killed its top general by launching its own attacks on US military bases in Iraq.

  • It then took responsibility that it had mistakenly shot down a Ukrainian passenger plane, killing 176 passengers.

  • Political tensions de-escalated when US did not retaliate further – leaving equity prices and US treasury yields room to climb higher.  

  • Optimism surrounding the US and China inking its phase 1 trade deal this week has also helped nudged equity prices higher.

  • Tsai Ing-Wen, Taiwan’s 1st female president, secured her presidential position for the 2nd term after a landslide victory at the polls.

  • Technology stocks remained on the front page, hogging the headlines for the stellar performance that it has shown in recent weeks:

    • The NYSE FANG+ Index which tracks 10 of the largest tech-related companies listed in the US have recorded a 5.9% gain (in MYR terms) since the start of the year till 10 Jan 2020.

    • Tesla’s share price have continued to trend higher, gaining 13.9% (in MYR terms) over the same period, as markets were excited with the prospects of the electronic car manufacturer increasing its production scale through its latest Gigafactory in Shanghai.

    • Is this an opportunity to go double long with the TradePlus NYSE FANG+ Daily (2x) Leveraged Tracker (0830EA), or do you think the it may be time for a correction, making it an opportune time to short the market with the TradePlus NYSE FANG+ Daily (-1x) Inverse Tracker (0831EA)?

 

In other economic news

  • US non-farm payrolls released for December were disappointing when data came in weaker than expected.  Only 145K new jobs were added, much weaker than the 164K forecasted by analysts.

  • A total of 2.1 million jobs were recorded for the whole 2019, slower than the 2.7 million recorded for the previous year – said to be effects of slowing economic growth, and on-going trade tensions.

  • Average hourly earning’s growth has also weakened, trending 2.9% lower.

  • Unemployment numbers as a whole remained low at 3.5%.

 

What to look out for this week?

  • Will look out for more details phase 2 of the US-China trade deal after President Trump indicated that negotiations would “start immediately”.

  • China is also set to release its GDP numbers, and trade export numbers later this week. Expectations are for China’s GDP numbers to be supported by infrastructure projects – which have now moved on from its investment phase to its production phase.

  • Is the improving investors’ sentiment towards US, and China’s equity market be an opportunity: 

    • For China’s consumption focused TradePlus S&P New China Tracker (0828EA) to climb higher?

    • Or to leverage on the rising trend through the TradePlus HSCEI Daily (2x) Leveraged Tracker (0832EA), an ETF that tracks the HSCEI index.

  • While some clarity on the US-China trade negotiations have been reached, upcoming economic data, and the shadow of the political tensions stemming from Iran is still lurking.  Any surprises could drive market volatility higher, making it feasible for some diversification into the physically-backed Gold ETF -  TradePlus Shariah Gold Tracker (0828EA), or even some exposure into hedging tools such as the TradePlus NYSE FANG+ Daily (-1x) Inverse Tracker (0831EA), or the TradePlus HSCEI Daily (-1x) Inverse Tracker (0833EA).

 

A look at the performance of the TradePlus ETFs

 

Bursa
Stock Code

TradePlus Exchange Traded Funds

2019

YTD

1 Week

Closing NAV

(10 Jan 2020)

0828EA

Shariah Gold Tracker

15.50%

1.29%

-0.59%

2.0473

0829EA/0829EB

S&P New China Tracker

14.75%

4.64%

1.74%

6.3366

0830EA

NYSE FANG+ Daily (2x) Leveraged Tracker

13.77%

11.26%

7.69%

5.0631

0831EA

NYSE FANG+ Daily (-1x) Inverse Tracker

-7.10%

-5.70%

-3.56%

3.5041

0832EA

HSCEI Daily (2x) Leveraged Tracker

8.62%

1.08%

0.51%

2.1957

0833EA

HSCEI Daily (-1x) Inverse Tracker

-4.70%

-0.61%

-0.31%

1.8943

Source: Affin Hwang AM as at 10 January 2020. All prices and returns are quoted in MYR terms, and reflects the closing NAV of the ETF.

 

A look at the performance of major global indices

Index Performance

2019

YTD

1 Week

1 Month

3 Months

6 Months

Asian Markets

FMBKLCI

-6.02

0.17

-1.24

1.90

2.55

-5.21

FTSE Straits Times Index

5.34

0.42

-0.05

1.54

4.59

-3.28

Taiwan Stock Exchange

24.02

-0.34

-1.10

2.84

10.16

13.70

Korean Stock Exchange

2.60

-0.47

1.31

5.89

8.75

7.23

S&P BSE Sensex Index

10.73

0.91

0.84

1.07

6.74

2.54

Ho Chi Minh Stock Index

6.11

0.43

-0.28

-1.29

-4.48

-1.73

Thailand Stock Exchange Index

12.01

-1.53

-1.66

0.21

-3.46

-7.93

Jakarta Composite Index

4.93

-0.02

-0.18

1.00

4.01

-1.17

Philippines Composite Index

7.48

-1.11

-0.25

-1.19

-0.52

-3.59

MSCI AC Asia (ex-Japan) Index

14.15

1.86

0.68

5.92

11.44

7.63

MSCI AC Asia (ex Japan) High Dividend Yield

8.83

0.20

-0.54

4.53

8.31

3.56

Bloomberg Asia REIT Index

19.38

-1.08

-1.26

-2.87

-5.23

0.46

 

 

 

 

 

 

 

Hong Kong / China Markets

S&P New China Sectors Ex A Share Index

24.24

4.72

1.85

9.27

15.89

12.84

Hang Seng Index

8.52

1.55

0.19

6.87

9.40

0.75

Hang Seng China Enterprise Index

9.75

0.85

-0.34

6.93

8.29

4.47

Shanghai Composite Index

18.97

1.66

0.31

5.46

4.91

3.84

Shanghai Shenzhen CSI300 Index

32.37

1.90

0.47

6.19

7.46

7.62

MSCI China Index

19.76

3.22

1.09

8.69

15.30

12.04

FTSE China 50 Index

9.78

1.31

-0.04

7.25

9.06

5.56

 

 

 

 

 

 

 

Developed Markets / Commodities

S&P 500 Index

27.52

0.73

0.32

2.04

8.10

7.54

FTSE 100 Index

15.42

-1.26

-1.27

2.02

8.21

3.68

Tokyo Stock Price Index

15.50

-0.47

-0.47

-1.96

5.18

7.79

NYSE FANG+ Index

38.18

5.91

3.58

12.88

25.01

24.34

MSCI Europe Index

18.60

-0.47

-0.90

1.54

7.19

5.01

LBMA Gold Price

17.58

1.35

-0.53

3.53

-0.12

9.41

Bloomberg WTI Cushing Crude Oil Spot Index

33.05

-3.64

-6.94

-2.44

7.23

-3.69

Source: Bloomberg as at 10 January 2020. All returns are quoted in MYR terms.

 


Disclaimer: This article has been prepared by Affin Hwang Asset Management Berhad (hereinafter referred to as “Affin Hwang AM”) specific for its use, a specific target audience, and for discussion purposes only. All information contained within this presentation belongs to Affin Hwang AM and may not be copied, distributed or otherwise disseminated in whole or in part without written consent of Affin Hwang AM. The information contained in this presentation may include, but is not limited to opinions, analysis, forecasts, projections and expectations (collectively referred to as “Opinions”). Such information has been obtained from various sources including those in the public domain, are merely expressions of belief. Although this presentation has been prepared on the basis of information and/or Opinions that are believed to be correct at the time the presentation was prepared, Affin Hwang AM makes no expressed or implied warranty as to the accuracy and completeness of any such information and/or Opinions. As with any forms of financial products, the financial product mentioned herein (if any) carries with it various risks. Although attempts have been made to disclose all possible risks involved, the financial product may still be subject to inherent risk that may arise beyond our reasonable contemplation. The financial product may be wholly unsuited for you, if you are adverse to the risk arising out of and/or in connection with the financial product. Affin Hwang AM is not acting as an advisor or agent to any person to whom this presentation is directed. Such persons must make their own independent assessments of the contents of this presentation, should not treat such content as advice relating to legal, accounting, taxation or investment matters and should consult their own advisers. Affin Hwang AM and its affiliates may act as a principal and agent in any transaction contemplated by this presentation, or any other transaction connected with any such transaction, and may as a result earn brokerage, commission or other income. Nothing in this presentation is intended to be, or should be construed as an offer to buy or sell, or invitation to subscribe for, any securities. Neither Affin Hwang AM nor any of its directors, employees or representatives are to have any liability (including liability to any person by reason of negligence or negligent misstatement) from any statement, opinion, information or matter (expressed or implied) arising out of, contained in or derived from or any omission from this presentation, except liability under statute that cannot be excluded.

 

Warning Statement: A Prospectus is available for the TradePlus Shariah Gold Tracker and TradePlus S&P New China Tracker, while a Master Prospectus is available for the TradePlus NYSE® FANG+TM Daily (2x) Leveraged Tracker, TradePlus NYSE® FANG+TM Daily (-1x) Inverse Tracker, TradePlus HSCEI Daily (2x) Leveraged Tracker and TradePlus HSCEI Daily (-1x) Inverse Tracker (collectively known as the “TradePlus L&I ETFs”), and investors have the right to request a copy of it. Investors are advised to read and understand the contents of the Prospectus dated 28 November 2017 and Supplementary Prospectus dated 2 July 2019 (for TradePlus Shariah Gold Tracker), and Prospectus dated 15 January 2019 and Supplementary Prospectus dated 2 July 2019 (for TradePlus S&P New China Tracker), as well as the Master Prospectus dated 26 November 2019 (for the TradePlus L&I ETFs) before investing. The Prospectus / Supplementary Prospectus / Master Prospectus have been registered with the Securities Commission Malaysia, who takes no responsibility for its contents. An electronic copy of the Prospectus / Supplementary Prospectus / Master Prospectus can be obtained at Affin Hwang Asset Management Berhad’s website www.tradeplus.com.my. As with any forms of financial products, the financial products mentioned herein carries with them various risks. Investors are advised to consider the general and specific risks involved as stipulated in its Prospectus / Supplementary Prospectus / Master Prospectus before investing. There are also fees and charges involved when investing in these funds, and investors are advised to consider the fees and charges carefully before investing. The price of units and distribution payable, if any, may go down as well as up and past performance of the funds should not be taken as indicative of their future performance.

 

Licensing Disclosure Statement & Conditions: The "S&P New China Ex A-Shares Index" is a product of S&P Dow Jones Indices LLC, a division of S&P Global, or its affiliates (“SPDJI”) and has been licensed for use by Affin Hwang Asset Management Bhd. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC, a division of S&P Global (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Affin Hwang Asset Management Bhd. TradePlus S&P New China Tracker is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P New China Ex A-Shares Index.

 

Licensing Disclosure Statement & Conditions: Source ICE Data Indices, LLC (“ICE Data”), is used with permission. “NYSE® FANG+™” is a service/trade mark of ICE Data Indices, LLC or its affiliates and has been licensed, along with the NYSE® FANG+™ Daily 2X Leveraged Index and NYSE® FANG+™ Daily 1x Inverse Index (“Indices”) for use by Affin Hwang Asset Management Berhad in connection with the TradePlus NYSE® FANG+™ Daily (2x) Leveraged Tracker and the TradePlus NYSE® FANG+™ Daily (-1x) Inverse Tracker (the “Product”). Neither Affin Hwang Asset Management Berhad nor the Product, as applicable, is sponsored, endorsed, sold or promoted by ICE Data Indices, LLC, its affiliates or its Third Party Suppliers (“ICE Data and its Suppliers”). ICE Data and its Suppliers make no representations or warranties regarding the advisability of investing in securities generally, in the Product particularly, or the ability of the Index to track general stock market performance. ICE Data’s only relationship to Affin Hwang Asset Management Berhad (“Licensee”) is the licensing of certain trademarks and trade names and the Index or components thereof. The Index is determined, composed and calculated by ICE Data without regard to the Licensee or the Product or its holders. ICE Data has no obligation to take the needs of the Licensee or the holder of the Product into consideration in determining, composing or calculating the Index. ICE Data is not responsible for and has not participated in the determination of the timing of, prices of, or quantities of the Product to be issued or in the determination or calculation of the equation by which the Product is to be priced, sold, purchased, or redeemed. Except for certain custom index calculation services, all information provided by ICE Data is general in nature and not tailored to the needs of Licensee or any other person, entity or group of persons. ICE Data has no obligation or liability in connection with the administration, marketing, or trading of the Product. ICE Data is not an investment advisor. Inclusion of a security within an index is not a recommendation by ICE Data to buy, sell, or hold such security, nor is it considered to be investment advice.

 

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