Bursa Community
Would you like to react to this message? Create an account in a few clicks or log in to continue.
Bursa Community

Bursa Malaysia Stock Forum - Enriching You!


Tong Kooi Ong blogs How will the stockmarket react to the coming Budget?

Bursa Community :: Community News

Go down

Tong Kooi Ong blogs How will the stockmarket react to the coming Budget? Empty Tong Kooi Ong blogs How will the stockmarket react to the coming Budget?

Post by Cals Fri 18 Oct 2013, 05:41

Tong Kooi Ong blogs How will the stockmarket react to the coming Budget?
Business & Markets 2013
Written by Tong Kooi Ong of theedgemalaysia.com   
Thursday, 17 October 2013 20:30
INTO the last trading week before the presentation of the Malaysian Budget on 25 October, the question that begs an answer is whether I should invest more into the capital markets (shares and bonds), stay with my current portfolio or reduce my exposure.

Let’s start with where we are, with a chart of the FBM Kuala Lumpur Composite Index below. The market has done fairly well gaining by 9% in the last 12 months and 25% over the last 2 years. However, in comparison to other markets, we have generally underperformed.

In terms of valuations, the market is trading at approximately 16.84 times prospective PER with a 3.12% dividend yield. It is reasonable and not demanding in comparison to its historical data.
Predicting what the stockmarket will do is voodoo science. Indeed, one of the three winners for this year’s Nobel Prize in Economics, Eugene Fama, is best known as the father of the Efficient Market Hypothesis. The belief that all information are already fully incorporated into the stock price.

Nevertheless, for us practitioners, we live on the belief that there is a price discovery process and markets do become irrational. This line of thought is in tune with the other winner of this year’s Nobel Prize in Economics, Robert Shiller.

Even Fama provides for the possibility of making a buck out of the stockmarket, noting local risk factors as a cause of differential portfolio returns.

Ultimately, your investment choices are uniquely yours. It is about the risk you are willing and able to take. Putting all your money into a bet on whether the market will go up or down will be truly unwise.

This week in the Trade Wise column of The Edge, I share my views on the immediate outlook for the Malaysian stockmarket. It reflects my choices and my risk and reward trade-offs. Not necessarily yours.
[You must be registered and logged in to see this image.]
*Source: Bloomberg Daily Index Prices
*Source: Bloomberg Monthly Index Prices [Base = 100 @ 14 Oct 2011; Last date = 14 Oct 2013]

Tong Kooi Ong is executive chairman of The Edge Media Group. Feedback is welcomed at [You must be registered and logged in to see this link.]
Cals
Cals
Administrator
Administrator

Posts : 25277 Credits : 57721 Reputation : 1766
Male Join date : 2011-09-08
Location : global
Comments : “My plan of trading was sound enough and won oftener that it lost. If I had stuck to it I’️d have been right perhaps as often as seven out of ten times.”
Stock Exposure : Technical Analysis / Fundamental Analysis / Mental Analysis

Back to top Go down

Back to top

- Similar topics

Bursa Community :: Community News

 
Permissions in this forum:
You cannot reply to topics in this forum