Affin Huang and Macquarie jointly organized a talk title "2H 2019 Market Outlook" at Securities Commission Malaysia.
My interest in joining this talk was due to one of the talk about structured warrants, I wanted to have a different perspective from another different structured warrant issuer house (Macquarie). Previously I already attended another warrants course organized by Kenanga Investment Bank.
This was the first time I was going to Securities Commission to attend such an event. The building was quite impressive, it had classy furniture, well polished marble flooring and top end security. Entering the building required bags to be xray scanned and guests need to walk through a metal detector. Compared to Bursa Malaysia's building, this place is way nicer I guess is because Securities Comission is a government body like Bank Negara so they have good budgets and have a monopoly on some aspects in their respective industry.
The 1st talk was given by chief economist of Affin Hwang, Alan Tan. Alan showed and explained a few charts PMI , OECD that manufacturers are growing caution amid the trade tensions between China and US. Alan Tan mentioned that long term both US and China stand to lose in a prolonged trade war.
However, Alan mentioned that Malaysia economy is strong enough to weather global recession as unemployment rate is low with healthy income growth in Malaysia. Malaysia banks also have quite low levels of NPL (Non performing loans). Malaysia's new government PH is also committed to reduce expenditure evident on the renegotiated costs of big infrastructure projects (eg MRT, LRT, ECRL). Unlike the past Asian Financial Crisis, banks in Malaysia are well capitalized to weather through the next financial storm (probably will be called Global Financial Crisis).
One slide pique my interest also was the IMF World Competitive Ranking countries. Alan pointed out Indonesia and Thailand are making progress chasing Malaysia from behind.
The points in Alan Tan's talk were
The sectors Affin Hwang is bullish on were
The 2nd talk was about introducing Affin Hwang's revamp stock trading website Einvest 2.0 which will be launching soon. One thing it has got is the Morningstar stock filtering screen which enables value investors to filter out stocks based on value investing criterias (PE, Dividend Yield etc)
The 3rd was by a lanky guy called Leong Kah Meng from Macquarie. Macquarie is an Australia Bank and supposedly is awarded title as best warrant issuer in Malaysia. Kah Meng explained from basics to some depth of structured warrants. Basically call warrants allows traders to profit from up and down cycle of stocks. Kah Meng also mentioned that warrant trading volume has increase quite a lot recently due to exemption of stamp duty on warrant purchases.
Some points I jotted down from the talk :
Kah Meng mentioned that planning the trade and deciding the direction the day before trading day is important as it will determine what kind of warrant to buy (put or call) based on the trend of the underlying share.
The 4th talk was quite interesting as it's quite new to me. Henry Lee from Affin Hwang introduced SBL (Securities Borrowings and Lendings) as a tool to increase returns on investment portfolio (He called it achieving the Alpha). Basically in a nutshell it is for individual retail investors who are holding large swaths of a certain stock, they can loan the stocks out to other traders/investors with Affin Hwang as the intermediary company. The retail investors holding the stocks will get a certain return on the stocks they loaned out. In the past loaning of stocks were exclusive to big banks but not individual retail investors/traders can loan out their stock holdings.
Participating in SBL requires opening an SBL account with Affin Hwang
Note : I also read somewhere Bursa Malaysia planning to use blockchain to record SBL borrowing transactions.
The 5th talk was about share margin financing by KH Tan, a burly sized guy who is currently the head of Share Margin Finance in Affin Hwang. The interesting part was Affin Hwang offering T+7 days to settle, to allow investors to be able to do contra purchases (profit or loss) before even settling(paying).
The final talk was about Affin Hwang's ETF (Exchange Traded Funds). Affin Hwang's ETFs are listing on Bursa Malaysia and is prefixed with TradePlus. ETFs in Malaysia are very thinly traded and are not in investor radar. The interesting ETF that caught my eye was the gold ETF as so far there are very few products that are liquid enough like a gold ETF. I consider gold savings account and gold saving apps like HelloGold to be quite slow and illiquid. With ETFs, we can trade on the gold price. While Bursa Malaysia has got gold futures, you need to open a futures account to trade the gold futures. Therefore I view Affin Hwang's Gold ETF to be another instrument investors/traders can consider in their financial arsenal. However, I do not think the general retail investor with a full time job will use this ETF with the availability of Roboadvisors like Stashaway which invests in US ETFs where the US market ETF is way bigger than in Malaysia.
I left the room from then on to take a quick lunch offered outside. Overall the event was well organized and the environment was a good to learn stuff.
Some of the important points that I am planning some action
This was the first time I was going to Securities Commission to attend such an event. The building was quite impressive, it had classy furniture, well polished marble flooring and top end security. Entering the building required bags to be xray scanned and guests need to walk through a metal detector. Compared to Bursa Malaysia's building, this place is way nicer I guess is because Securities Comission is a government body like Bank Negara so they have good budgets and have a monopoly on some aspects in their respective industry.
 |
| Declining semiconductor sales |
The 1st talk was given by chief economist of Affin Hwang, Alan Tan. Alan showed and explained a few charts PMI , OECD that manufacturers are growing caution amid the trade tensions between China and US. Alan Tan mentioned that long term both US and China stand to lose in a prolonged trade war.
However, Alan mentioned that Malaysia economy is strong enough to weather global recession as unemployment rate is low with healthy income growth in Malaysia. Malaysia banks also have quite low levels of NPL (Non performing loans). Malaysia's new government PH is also committed to reduce expenditure evident on the renegotiated costs of big infrastructure projects (eg MRT, LRT, ECRL). Unlike the past Asian Financial Crisis, banks in Malaysia are well capitalized to weather through the next financial storm (probably will be called Global Financial Crisis).
One slide pique my interest also was the IMF World Competitive Ranking countries. Alan pointed out Indonesia and Thailand are making progress chasing Malaysia from behind.
The points in Alan Tan's talk were
- Malaysia GDP forecasted to be 4.5 %
- If US central bank lowers rates, Malaysia Ringgit will appreciate
The sectors Affin Hwang is bullish on were
- REITS
- Healthcare
- Axis REIT
- Alliance Bank
- Kossan (gloves manufacturing)
- Supermax (gloves manufacturing)
- AEON credit
- Syarikat Takaful
- serva Dinamik
- QL Resources
Quite obvious on the selection, Affing Hwang has chosen recession proof industries (gloves, REITS, banking and financing, food and insurance) in view of slower global growth.
The 3rd was by a lanky guy called Leong Kah Meng from Macquarie. Macquarie is an Australia Bank and supposedly is awarded title as best warrant issuer in Malaysia. Kah Meng explained from basics to some depth of structured warrants. Basically call warrants allows traders to profit from up and down cycle of stocks. Kah Meng also mentioned that warrant trading volume has increase quite a lot recently due to exemption of stamp duty on warrant purchases.
Some points I jotted down from the talk :
- Structured warrants is the 2nd largest traded product after the main market, bigger than the ACE market
- Company warrants (issued by companies) are noted with W while structured warrants (issued by investment banks) are denoted with C or H symbol (eg MyEG-C58)
- Structure warrants trade like shares, no need worry about margin call, unlike futures and buying on margin. Only need to worry about expiry date
- Effective gearing is not fixed, higher the share price goes, the effective gearing will be lower
- Do not buy a warrant going to expire in 1 month (important)
- Avoid wide spreads (when buy and sell prices are very big)
- Structured warrants are limited in inventory and can get sold off, bid and ask price will be very wide during this time
- Sophisticated investors use put warrant to protect stock portfolio from dropping, gains earned from put warrants will offset losses on the underlying stock
- Strucu
Macquarie has got index warrants where the underlying product is the market indices like Hang Seng and China A-50.
Very similar to Kenanga Investment bank's warrant website, the Macquarie's warrant website also has got warrant trading tools like warrant scanner (filter) and Live Matrix (for timing entry and exits).
 |
| Structured warrants are like a double edge sword |
Participating in SBL requires opening an SBL account with Affin Hwang
Note : I also read somewhere Bursa Malaysia planning to use blockchain to record SBL borrowing transactions.
The 5th talk was about share margin financing by KH Tan, a burly sized guy who is currently the head of Share Margin Finance in Affin Hwang. The interesting part was Affin Hwang offering T+7 days to settle, to allow investors to be able to do contra purchases (profit or loss) before even settling(paying).
The final talk was about Affin Hwang's ETF (Exchange Traded Funds). Affin Hwang's ETFs are listing on Bursa Malaysia and is prefixed with TradePlus. ETFs in Malaysia are very thinly traded and are not in investor radar. The interesting ETF that caught my eye was the gold ETF as so far there are very few products that are liquid enough like a gold ETF. I consider gold savings account and gold saving apps like HelloGold to be quite slow and illiquid. With ETFs, we can trade on the gold price. While Bursa Malaysia has got gold futures, you need to open a futures account to trade the gold futures. Therefore I view Affin Hwang's Gold ETF to be another instrument investors/traders can consider in their financial arsenal. However, I do not think the general retail investor with a full time job will use this ETF with the availability of Roboadvisors like Stashaway which invests in US ETFs where the US market ETF is way bigger than in Malaysia.
I left the room from then on to take a quick lunch offered outside. Overall the event was well organized and the environment was a good to learn stuff.
Some of the important points that I am planning some action
- Load up on AXREIT
- Build up a warchest to trade structured warrant
- Load up on Indonesia funds