1) Fitch is planning to downgrade the credit rating of Malaysia from A- to BBB. This would cause the Malaysia Government Bond 's yield to spike above 5%. This coupled with a high foreign bondholding would mean that the yield might spike further and ringgit will fall further if some foreign funds decide to exit in exodus. See you at 4.00?
2) GST is not a April fool's joke. With the implementation of GST, the consumer mood will deteriorate. The country's GDP will be affected as well based on the experience in Japan and Singapore. Lets hope Malaysia will not experience technical recession at the end of the year.
3) The Kelantan flood repair bill has not come in yet. Nobody knows as of now the extent of the destructions brought by the worst flood in some time. The government will have to foot the repair bill soon.
4) The oil price will probably linger at 50USD level for the next one to two years at least. Although Malaysia has become a net oil importer according to the government, we still depend a lot on oil revenue. In 2014, the government receive at least RM 60 billion from Petronas. Other than that, due to the capex cut, there are less projects for the downstream and upstream companies in Malaysia. Hopefully these companies can stay profitable in the mean time.
Based on the few points above, I have decided to sell
- all 40000 units of Hovid @ RM 0.43
- some 8500 units of Inari @ RM 3.33
- all 1500 units of Inari - WB @ RM 1.47
- all 3000 units of Westport @ RM 3.70.
*I have actually forgotten to sell Jaya Tiasa. It will be done tomorrow.(Update: JTiasa has been sold as planned @ RM 1.70 each
So Huat Fund looks like this today: