Market Shifts and Opportunities: The End of the Tech Run?
Of course, it's not entirely over. China's sanctions and Trump's protectionist approach aren’t new, but we might see a pause in tech due to market rotation. Investors indicate that small caps are still catching up. Meanwhile, there’s growing caution around overinvestment in AI, especially in the U.S.
In Malaysia, sectors like construction and property have benefited from the data center boom. The key question is how this theme benefits the entire nation. How can it address issues like the cost of living, job opportunities, and skill shortages, especially in the semiconductor sector?
Despite these concerns, Malaysia’s 2Q GDP rose 5.8% versus the estimated 4.7%, highlighting improvements in domestic demand, private consumption, and investments. Looking ahead, targeted subsidies could boost the economy further, supporting the GDP estimate of 5.2% for the year.
Stock Market Boom: BURSA on the Rise
The stock market has performed well, and $BURSA (1818.MY)$ is the best proxy to ride on this trend. With 2Q results out on July 30th, robust equity ADTV (up 103% YoY) suggests net profit could rise by over 70%. Investors are eyeing the potential for a special dividend payout, which could increase the FY24 yield from 3.4% to between 5.5% and 7%.
Construction Craze: High-Speed Rail Heats Up
The construction sector remains hot. The government will decide on the High-Speed Rail (HSR) project by year-end, with three consortia shortlisted. Key factors include funding, land acquisition, and securing Singapore’s agreement. Despite the government’s reluctance to provide funding, consortia involving BJLAND, IJM, MRCB, and YTL are pushing for support. Teh Tarik Invest’s top picks for HSR exposure are $YTL (4677.MY)$ and $ECONBHD (5253.MY)$, while $GAMUDA (5398.MY)$ remains a strong call with its dominant position both locally and internationally having recently won a RM5bn job in Western Australia and possible inclusion as KLCI constituent (next review Dec ‘24) will certainly attract foreign investors.
EV Market Shift: End of the Price Wars?
In the EV market, the price war seems to be cooling off, with NEV players launching lower-end models and major players like $BYD COMPANY (01211.HK)$ and $Tesla (TSLA.US)$ stopping aggressive price cuts. BMW China is even raising prices by RMB30k per vehicle. In Malaysia, meaningful cash handouts are expected to spur spending, benefiting auto plays like SIME and BERMAZ.
- Teh Tarik Invest
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Thoughts on Malaysia & US markets while sipping a cup of hot teh tarik.
“Deploying more capital - steady lads”
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Priscilla JJ : Thank you for the insight.