A random check on the top 20 largest holdings by three fund managers shows that most of the stocks recorded gains in 1H19.
According to Bloomberg data, the equity value of KWAP’s 20 largest holdings in Bursa Malaysia-listed companies, with collective market capitalisation of RM4.88 billion as at end-2018, recorded an 8.28% or RM403.85 million appreciation in 1H19, the highest percentage gain among the four institutions.
Among the largest gainers in KWAP’s portfolio was Pentamaster Corp Bhd, whose share price gained 57% to RM2.88 on the final trading day of June this year, followed by VS Industry Bhd, which leaped nearly 55% to RM1.10 on June 28.
KWAP owns a 7.3% stake in Pentamaster and 11.8 in VS Industry.
Over at the EPF, in terms of absolute value, the equity value of its 20 largest shareholdings in Bursa-listed firms appreciated by RM4.01 billion in 1H19, or 5.72%, against the market value of RM70.05 billion as at end-2018.
Axiata Group Bhd contributed the largest boost to the provident fund’s equity portfolio. The EPF’s stake in Axiata has climbed by an estimated RM1.57 billion or 27.5% to RM7.29 billion as at end-June.
The EPF owns a 16% stake in the regional telecommunications giant, which is currently in talks with Telenor on merging the duo’s Asian operations.
PNB also holds a substantial stake of 12% in Axiata, but the telco’s share price increase seemed to be less impactful on the fund’s equity portfolio. The value of 20 largest holdings in Skim Amanah Bumiputera’s equity portfolio appreciated by a mild 2.3% gain.
Skim Amanah Bumiputera’s stake in Axiata appreciated by an estimated RM1.18 billion or 27.5% to RM5.46 billion by end-June.
However, the investment trust’s portfolio value dragged by its investment in Malayan Banking Bhd, whose share price fell 3.2% or 29 sen to RM8.88 in 1H19. It holds a 34.7% stake in the bank.
Skim Amanah Bumiputera’s shareholding value in the country’s largest bank dropped about RM1.74 billion or 4.8% to RM34.59 billion in the six-month period.
When contacted, Areca Capital Sdn Bhd chief executive officer Danny Wong told The Edge Financial Daily that although the FBM KLCI performance was not on par with its regional peers in 1H19, it is worth noting that the broader market remains resilient in Malaysia.
“If you look at the FBM Top 100, FBM Mid 70, and FBM Small Cap, they all went up in the first half of the year, so the market overall is quite good, because Asia regional [markets were] rising as well, so locally, only a few index heavyweights dragged the KLCI,” he said.
The KLCI fell 1.1% in 1H19, contrary to the trend of the other three indices which track broader range of stocks.
FBM Top 100 gained 1.64% in the six-month period, while FBM Mid 70 was up 11.7%, and FBM Small Cap climbed 15% in the same period.
“For the second half of the year, I am quite optimistic,” said Wong, however he noted that the market might go through a consolidation phase before it heads higher partly because of the weak corporate earnings in the second quarter.
Nonetheless, others in the investing fraternity hold a more cautious view given the certain trade tensions between China and the US. They expects trading sentiment to remain muted for the rest of the year.
“Comparatively, our stock market performance is still slower than regional peers, and some of these stocks were badly beaten down in the second half of 2018, so there was partly recovery in 1H19 as well, not entirely appreciation.
“There may be some news-driven excitement in the second half, but some of the mega public project like the ECRL (East Coast Rail Link) contract award are more likely to happen only early next year, plus political risk, there are still a lot of uncertainties in the market,” he said.
https://www.theedgemarkets.com/article/malaysian-market-laggard-govt-funds-record-gains
