Global stock markets continued its downward tumble despite the monetary and stimulus packages being released by global central banks. The impact from the outbreak on the global economy is expected to be severe as lockdown measures get implemented across the globe on the back of the rapid rise in Covid-19 cases outside of China. The heightened level of uncertainty had led to a major sell-off across asset classes as investors scrambled to shift their exposure into cash.


In the news

  • It had been a very different tune for the US equity market in recent weeks. After recording new highs only a month ago, the US equities have now slipped to its lowest level since early 2017.
  • Markets had failed to pick-up pace despite the Federal Reserve coming in to slash interest rates to the 0% to 0.25% range.
  • The intensity of the sell-off in US equities triggered the “circuit breaker” again last week as investors’ concerns heightened on the lack of clarity by the federal government on how it intends to address the worsening outbreak situation.
  • Tech-related stocks were seen to have a little bit more resilience as the work-from-home shift by many boosted demand for tech-related services.
  • This week will also have the NYSE closing its trading floor to fully rely on electronic trading as the pandemic worsens.
  • Oil price slumped below the USD20 per barrel level last week as the wagging oil war between Saudi Arabia and Russia continued. 
  • Gold faced the same selling pressures, sliding 2.7% lower alongside other asset classes. 
  • Inverse strategy solutions have been the interest of investors as downward pressures continued across all asset classes, leaving little room to seek refuge in. The 0831EA, and 0833EA both saw positive returns over the week as global financial markets tumbled.


In other economic news

  • Global central banks continued to push out monetary and stimulus packages in a bid to soften the economic impact from the virus outbreak.
    • The US Feds slashed its rates by 1.0% to bring its rates to the range of 0% to 0.25%.
    • Its asset purchase program would include short-term municipal bonds, an expansion from the earlier Treasury bonds, and mortgage backed securities.
    • The US are also looking at stimulus programs (of more than USD1 trillion) which includes monthly cash pay-outs to households, and loans to badly affected industries.
    • The ECB is also looking to follow suit with 1.0 trillion in new fiscal spending.  Additionally, it has indicated that it will do whatever it takes to cope with the crisis.
    • While the Bank of Japan kept its rates unchanged, it will be increasing its buying of assets adding that it will also put in place additional steps if required to.
    • RBA took to an emergency gathering ahead of its scheduled meeting to cut its interest rates to new historic lows. Its official cash rate now sits at 0.25%.
    • BNM took to reducing the SSR (Statutory Reserve Requirement) last week. The move would boost liquidity as it reduced the banking sector’s reserve requirement from 3% to 2%, releasing approximately RM14 billion into the system.
  • China is seeing some semblance of its economy moving back on track.
    • Daily coal consumption is back up to 80% of its normal level.
    • More than 50% of its migrant workers have returned to their workplace.
    • Strict quarantine measures earlier imposed are now being loosened by the local authorities across the country.


What to look out for ahead

  • This week will see the release of US PMI numbers, and the final reading of its 4Q GDP.
  • How global economies will address the containment of the pandemic outbreak is expected to remain in the headlines.
    • The number of cases are expected to spread wider in the UK after its failure to take measures to contain the spread.
    • More lock-down measures are anticipated as the number of cases continue to rise rapidly on the global front.
  • Volatility will likely continue for global financial markets, with downward pressures to persist on the back of uncertainties surrounding the virus containment efforts.


ETF strategies at TradePlus

  • To Hedge:
    • 0828EA – a Gold-backed ETF widely used as a storage of value in times of market uncertainty.
    • 0833EA – a HSCEI Inverse strategy that helps hedge your portfolio against weakness from the performance of China companies listed on the HKex.
    • 0831EA – the NYSE FANG+ Inverse strategy that hedges against the performance of tech stocks listed in the US.
  • To Add Position:
    • 0829EA / 0829EB – a strategy that gives investors exposure into the consumer focused sector through China companies listed in HK, and the US.
    • 0832EA – a 2X leveraged strategy on the HSCEI that captures 2 times the performance of China companies listed on the HKex.
    • 0830EA – a 2X leveraged strategy on the NYSE FANG+ that captures 2 times the performance of US listed tech stocks.


A look at the performance of the TradePlus ETFs, and major global indices



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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 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. 

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