We maintain HOLD on MYETF DJ Islamic 25 but tweak our fair value (FV) down slightly to RM1.47 (from RM1.49) based on our FVs (for stocks under our coverage) and consensus FVs (for stocks not under our coverage). It is at a premium to its NAV of RM1.31 (Exhibit 3).
During the latest quarterly review of the benchmark index for MYETF DJ Islamic 25, i.e. Dow Jones Islamic Market Malaysia Titans 25 Index, the index provider S&P Dow Jones Indices decided to remove one constituent, namely, Genting Plantations, and replace it with Comfort Gloves. We are reflecting these changes in our revised valuation.
We believe the upside to glove stocks and hence the healthcare sector is now capped, on the back of the significant progress made in the development of Covid-19 vaccines as well as treatment methodology in recent months. Meanwhile, we maintain our views on other key sectors tracked by the ETF, i.e. consumer goods, oil & gas and telecommunications (Exhibit 2).
Despite the dented consumer confidence in the aftermath of the Covid-19 pandemic, sales of consumer goods will be supported by the inelastic demand for consumer staple items (particularly, food items). For consumer discretionary items, we see a bright spot in automobiles, driven by the sales tax holiday under the short-term Economic Recovery Plan (Penjana).
Meanwhile, we believe oil prices have found support with the gradual recovery in demand from China as it reopens its economy, while Opec+ continues to exercise production restraint. Telcos are riding on a new wave of digitalisation of the economy, partially offset by rising mobile competition amidst escalating capex requirements.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....