The temporary easing of external uncertainties (i.e. U.S. debt ceiling deadline and federal government shutdown) as well as the conclusion of Budget 2014 pushed the FBMKLCI higher in October, which marked the second consecutive month-on-month gain. In tandem with the positive trading sentiment, our OR portfolio tracker average total return recorded a +7.2% gain in October, which outperformed the FBMKLCI total return by 499bsp. We have closed our trading position in HOVID after with a handsome +52.1% gain and introduced four new stocks in October. Moving on to November, a short-term temporary pull-back is imminent, in our view, due to stretched valuations. Nevertheless, as 4Q is traditionally a strong seasonally quarter, the pull-back is expected to be temporary. The FBMKLCI is expected to find some supports at the 1,800 level with stronger supports at the 1,770 level.

Introduced four new stocks in October. Four new stocks were introduced, namely BERJAYA FOOD, GLOBETRONICS, YOONG ONN (YOCB), and EKOVEST in October. YOCB (FV: RM1.01) has gained the most by +15.4% since we recommended a Trading Buy call at RM0.78 on 29 October. YOCB, a small cap consumer stock mainly involved in manufacturing, distribution, and trading of home linens, home wares and bedding accessories, is set to benefit from the current property boom. We believe the stock has good earnings growth prospect and superior dividend yield. Meanwhile, we also made two NOT RATED calls on both Wellcall and Salcon in October as well as recommending a Trading Sell on HOVID at RM0.37 after the stock advanced by +52% since our highlight in late October last year.

Tracker portfolio continued to outpace the broader market performance. The US measures to avert a U.S. default and reopen the federal government led its market indices recording some of their best monthly gains of the year and also topping all-time highs. The positive trading momentums globally coupled with the conclusion of the Budget 2014 sent the local benchmark index higher in the second consecutive months to 1,806.85 (+2.16% MoM) in October. In tandem with the better global trading sentiment, our OR tracker portfolio (where we currently have 21 Trading Buy calls) total return continued to outperform the FBMKLCI by 499bps in October, mainly driven by FIBON, DAYA and ENGTEX which share price has surged by more than 20% MoM. On a YTD until 6th of November basis, our OR tracker portfolio average total return continued to outpace the benchmark index by 855bps, mainly underpinned by PESTECH (+104%), FIBON (+89%), ZHULIAN (+56%) and ENGTEX (+39%).

Average total return of +23% since inception. Our OR tracker portfolio has posted an average total return of +22.7%% since its inception on 14 August 2012, which outpaced the total return of +14.6% of the benchmark index during the same period. Nearly half of our 23 realised stocks had recorded >30% total return, of which FABER (where we took profit on 29 Aug with 104% total gain) remains as the champion in the realised gain list, followed by PWROOT (total returns: +68%) and GHL (+63%). Meanwhile, the worse performers since inception were BONIA, MKLAND and GUAN CHONG, at -17%; -13% and -12% negative total return, respectively.

Source: Kenanga