Happy New Year!

Global financial markets ended the year on higher ground despite a challenging year. The passing of a USD900 billion Coronavirus relief bill in the US lifted sentiment, but failed to maintain momentum as trading volume tapered off in the final week of the year as we headed into the holiday period. The rapid spread of the pandemic has continued to ravage global economies, leaving many in lockdown despite a vaccine. Gold price remained well supported on the back of the uncertainties to end the year with a respectable return despite the marginal dip last week.

 

In the News

  • Investors’ sentiment improved at the start of the year after President Trump signed a USD 900 billion Coronavirus relief bill that will see its citizens receive USD600 to ease their burden.  
  • The bill remained controversial as legislation to increase the pay-out to USD2,000 was objected by the Republican-led senate.
  • Vaccines started to be distributed into economies, with the UK population to be amongst the first to be vaccinated with the AstraZeneva and Oxford University vaccine after receiving an approval last week. 
  • However, economies remained on high alert as the discovery of a new strain of the virus is believed to spread more rapidly, heightening concerns amongst the medical professionals, where hospital capacities are reaching its maximum.
  • The delay in distributing the vaccine had kept investors on their toes, leaving tech-related stocks to continue its run. The NYSE FANG Index, which tracks 10 of the most renown tech names listed in the US rose 2.65% in MYR terms to end the year with a whopping 99.41% gain. The 0830EA, which aims to provide 2X the daily performance of the said index saw its NAV rise more than 160% in 2020 after rising more than 7% last week.
  • After prolonged debate, the UK and the EU finally reached a Brexit agreement – which saw stock prices, and the GBP currency strengthening.
  • At the same time, the EU had also reached an investment treaty with China which would give the bloc better access to China’s markets.  This will include sectors like automotive, private health care, cloud computing, and air transport services to name a few. 
  • China’s ability to be the first to contain the virus also boosted investors confidence, pushing the domestic equity indices higher on optimism that the economy will see even stronger growth in the coming year. 
  • However, tensions between the US and China continued to put pressure on markets. The NYSE had indicated that it would halt the trading of 3 China telco companies by 11 January, namely China Mobile, China Unicom, and China Telecom.
  • Nevertheless, China’s major indices climbed strongly, with the New China Economy Index (gauged by the S&P New China Sectors Ex A Share Index) rising 3.84% in MYR terms to end the year with a 41.79% gains. This benefitted the 0829EA, which tracks the Index – allowing the NewChina ETF to rise 3.48% last week to see a NAV-to-NAV rise of 35.68% in MYR terms for the year. In comparison, the Shanghai Composite Index rose 19.4% last year, while the CSI300 Index climbed 33.39% higher.
  • On the local front, performance of sectors were mixed, allowing the 0836EA to see a gain of 0.82% with the support of momentum stocks, while the broader KLCI slid 0.85% lower. 
  • The uncertainties that have continued to hover over global economies provided an opportunity for the safe haven Gold to see its price rise by more than 22% this year in MYR terms, as indicated by the LBMA Gold Price Index which ended the year at USD 1,891.10 per ounce. Despite the marginal dip last week, the 0828EA bagged a return of 20.5% for the year in MYR terms.  

 

On the Economic Data Front

  • US economy picking up on improved sentiment:
    • Home prices were seen rising faster than expected, despite the drop in home sales.
    • Jobless claims had also feel to its lowest level in almost a month at 787,000.

  • China expected to see steady growth for 2020 despite the challenges:
    • Official manufacturing PMI continued to expand in December, with a reading of 51.9.
    • Strong economic data flowing out of China has left analysts forecasting an economic growth of 1.9% - 2.1% for 2020.

 

ETF strategies at TradePlus

 

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

 

Learn more about TradePlus ETFs

www.tradeplus.com.my
www.facebook.com/TradePlusbyAffinHwangAM
#tradeplusaham
+(60) 12 250 8002
TradePlus ETF

 


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 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 (“Affin Hwang AM”) 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.