Effects of the Omicron variant’s heightened transmissibility was felt in January, as multiple nations around the globe saw record high daily cases numbers. While US market saw losses due to rising case numbers, rising inflation and rate hikes, economic data showed that it was still on track to economic recovery. In China, sentiment was dampened by continuous troubles in the property sector, despite seeing an interest rate cut. Locally, markets trailed the global negative sentiment to end in the red, mainly weighed down by industrials and the information technology sector. Gold price also did not fare well as news of higher-than-expected rate hikes dampened its performance.

In the News

  • The aggressive spread of the Omicron variant saw global case numbers rising exponentially in January, with multiple countries recording record high daily infections over the month.
  • Sentiment was further dampened by news that the US Federal Reserve is looking to raise interest rates as soon as March, while continuing its plan to taper bond purchases despite rising pandemic numbers.
  • As a result of the jittery sentiment, equities in the US took a nosedive, with the technology sector taking the hardest hit.
  • Throughout January, the Nasdaq Composite Index underperformed the broader market, dipping 8.47% in MYR terms while the FANG+ Index slid 7.25%. As a result, the 0831EA, which provides -100% exposure into the index managed to gain 6.45%.
  • The broader S&P 500 index dipped 4.72% in January, lifted by the energy sector which saw the biggest gains over the month as political tensions intensified at Ukraine.
  • The monetary stance was the opposite in China, as the PBOC announced a cut in interest rates as opposed to the US Fed’s hawkish stance. However, the rate cut was insufficient in lifting market sentiment.
  • Combined with rising COVID-19 cases in the “zero-COVID policy” nation, the ongoing uncertainties on the property sector also contributed to last month’s negative performance ahead of the Lunar New Year.
  • The S&P New China Sectors ex A Share Index managed to outperform the broader index, only dipping 3.27% while the Shanghai Composite Index and the CSI300 Index tumbled 7.00% and 6.97% respectively in MYR terms.
  • Hong Kong markets ended the month in the green in January, with the HSCEI Index upping 1.96% in MYR terms over the month. The 0832EA also recorded gains of 1.43% over the month.
  • In local markets, stocks echoed the negative sentiment across the globe, as the broader KLCI Index dipped 3.53% over the month. 
  • The DWA Technical Leaders Malaysia Index underperformed the broader market, dipping 7.78%, as stocks in the industrials and information technology sector saw the biggest losses over the month. Consequently, the 0836EA, which tracks the index also dipped by 7.81% over the month.
  • Crude oil prices surged over January amid heightened demand and expected supply constraints arising from the Russia-Ukraine tensions.
  • Gold prices however did not fare as well, as talk of the expected hefty interest rate hike in March brought the performance of the precious yellow medal into negative territory.
  • In January, the LBMA Gold Price Index ended 1.06% in the red, while the 0828EA which tracks the index dipped by 0.09%.

On the Economic Data Front

  • Resilient economic recovery justifies US Fed’s hawkish stance
    • GPI growth recorded at 1.7% last quarter, bringing 2021 growth to 5.7%, its largest annual growth in nearly 3 decades.
    • Consumer price Index (CPI) rose by 7.5% in 2021, its fastest pace in almost 4 decades.
    • Jobs report showed addition of 467,000 jobs despite Omicron fears, beating expectations by almost three-fold.
  • Economic recovery in China less optimistic than western counterparts
    • GDP growth in 4Q2021 recorded at 4.0% YoY against 4.9% YoY in Q3 but beat market expectations.
    • Manufacturing PMI fell into contraction territory at 49.1, the lowest level since February 2020.
    • Services PMI continued to expand but fell from December’s 53.1 to 51.4. 


 ETF strategies at TradePlus


A look at the performance of TradePlus ETFs, and Global Indices

Learn more about TradePlus ETFs

+(60) 12 606 8685
TradePlus ETF


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.