The rate of pandemic cases remains high with global number of cases now recorded at over 43 million. US indices reversed its 3-week gain amid ongoing uncertainties surrounding stimulus package negotiations. China recorded a 4.9% expansion in GDP for its third quarter, outpacing markets worldwide in terms of growth, and economic recovery from the pandemic. Locally, the market dipped as political uncertainty intensifies and pandemic case numbers continue to rise. Gold posted marginal gains of 0.34% to end the week at USD1,910/oz.
In the News
- COVID-19 cases continue to grab headlines, with the US seeing record daily high new infections in the past week, while Malaysia recorded over 1,000 daily new cases for the first time.
- The total number of COVID-19 cases worldwide now records at over 43 million, with over 1.1 million deaths.
- Hopes for an approved stimulus package before the upcoming US elections appear dim, as uncertainties about the prospects of aid continued throughout last week.
- Investors also kept a lookout for third quarter earnings last week, with 84% of reported earnings beating consensus estimates.
- While the start of the third quarter earnings showed positive results, major indices in the US reversed its 3 week gains due to uncertainties brought on by the stimulus package negotiations. The tech-heavy Nasdaq fared the worst throughout the week, dipping 0.84%, while the S&P 500 slid 0.31%.
- While the broader tech index dipped the most last week, the FANG+ index outperformed the market, gaining 0.78% as Twitter and Google’s parent company Alphabet led gains despite a significant dip in Netflix. The 0830EA, which provides a 2x leveraged exposure into the index, ended the week 1.30% in the green with YTD gains of 120.59% in MYR terms.
- China revealed its third quarter GDP, reporting a 4.9% annual rate growth as compared to a 3.2% rate in the second quarter. The YTD growth rate for China has turned positive at 0.7% y-o-y, further solidifying the country’s comeback since the pandemic hit China early this year while the rest of the world continues to grapple with the virus. Read more about the economy’s growth drivers here.
- E-commerce giant Alibaba has started promotions for its annual Singles Day sales, with demand expected to surge this year as the pandemic continues to keep international borders closed. Ant Financial, in which Alibaba Group holds a majority stake in, has gotten its final approval for its highly anticipated IPO listing.
- The S&P New China Sectors Ex A Share Index, which includes Alibaba Group as one of its top 10 holdings, outperformed the market, gaining 0.87% last week, as the CSI300 Index and the Shanghai Composite Index dipped 1.15% and 1.38% respectively in MYR terms. The 0829EA saw gains of 0.61% last week, with a YTD gain of 30.36%.
- Locally, politics and the rising coronavirus cases continues to grab news headlines, contributing to rising uncertainties in the country.
- Prime minister Muhyiddin Yassin’s proposal to declare a state of emergency over the COVID-19 crisis was rejected by the King, who also warned politicians against politicking which might threaten the stability of the country.
- With rapidly rising pandemic cases and political uncertainties, the FBM KLCI dipped 0.61% last week. Nevertheless, we still saw momentum drivers within the domestic space, which led to the momentum-focused Dorsey Wright Technical Leaders Malaysia Index to gain 0.14% despite the broader weakness.
- Gold price posed marginal gains last week, recording at USD1,910/oz amid global uncertainties. The TradePlus Shariah Gold Tracker (0828EA), which tracks the Gold price index upped 0.22%, while YTD returns in MYR terms for the ETF is now at 26.11%.
On the Economic Data Front
- US economy reports encouraging data:
- Weekly jobless claims fell to 787,000, its lowest level since March
- Continuing claims continues to fall sharply, from an expected 9.4 million to 8.4 million.
- While overall housing starts missed expectations, existing home sales rose by 9.4% in September, a 14-year high.
- EU economic recovery losing momentum:
- Several countries have tightened mobility restrictions in attempt to curb virus resurgence.
- Composite PMI data fell to 49.4% in October, signalling a contraction in business activity in the region.
- Services PMI dipped to 46.2 from 48.0, due to stricter coronavirus restrictions.
- UK government amends bailout plan to further support workers affected by lockdown measures.
- Chinese economic recovery outpaces the world:
- Third quarter GDP records expansion at 4.9% from a year earlier.
- Industrial outputs increased by 1.2% in September, surpassing pre-pandemic levels.
ETF strategies at TradePlus
A look at the performance of the TradePlus ETFs, and major global indices
Learn more about TradePlus ETFs
Disclaimer: This article has been prepared by AHAM Asset Management Berhad (“AHAM Capital”) specific for its use, a specific target audience, and for discussion purposes only. All information contained within this presentation belongs to AHAM Capital and may not be copied, distributed or otherwise disseminated in whole or in part without written consent of AHAM Capital. 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, AHAM Capital 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. AHAM Capital 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. AHAM Capital 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 AHAM Capital 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 copy of the Prospectus / Supplemental Prospectus for the TradePlus Shariah Gold Tracker and TradePlus S&P New China Tracker, the Prospectus for the TradePlus DWA Malaysia Momentum Tracker and TradePlus MSCI Asia Ex Japan REITs Tracker, as well as the Master Prospectus for the TradePlus NYSE® FANG+™ Daily (2x) Leveraged Tracker, TradePlus NYSE® FANG+™ 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”) can be obtained at Affin Hwang Asset Management's (“AHAM Capital”) website at www.tradeplus.com.my. Investors are advised to read and understand the contents of the Prospectus dated 28 November 2017 and Supplemental Prospectus dated 2 July 2019 (for TradePlus Shariah Gold Tracker), Prospectus dated 15 January 2019 and Supplemental Prospectus dated 2 July 2019 (for TradePlus S&P New China Tracker), Prospectus dated 9 July 2020 (for TradePlus DWA Malaysia Momentum Tracker), Prospectus dated 9 July 2020 (for TradePlus MSCI Asia Ex Japan REITs Tracker), as well as the Master Prospectus dated 26 November 2019 (for the TradePlus L&I ETFs) before investing. There are fees and charges involved when investing in the funds stated herein. Investors are advised to consider and compare the fees and charges as well of the risks carefully before investing. Investors should make their own assessment of the risks involved in investing and should seek professional advice, where necessary. 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. The Securities Commission Malaysia has not reviewed this material and takes no responsibility for the contents of this material and expressly disclaims all liability, however arising from this material.
You may refer to the relevant Licensing Disclosure Statement & Conditions at the respective webpages for each fund available on www.tradeplus.com.my.