Kenanga Islamic Cash Fund Report - June 2017

Transcription

1. June 2017 Market Review and Outlook Money Market Review In the Ringgit bond market last month , gains were driven by the stronger MYR and subdued external risks post French elections and OPEC meeting. Foreign players showed interest as USD/MYR headed lower from 4.3410 to 4.2813 over the month. At the May MPC meeting, Bank Negara Malaysia policymakers held the OPR at 3.00% as widely expected. Though projecting an overall neutral tone in the statement accompanying the rate decision, policymakers indeed sounded slightly more upbeat on growth compared with the previous MPC statement from the Mar 2017 policy meeting. In the latest statement, policymakers indicated growth remains driven by domestic and external demand. On the flipside, the central bank said the recent high inflation is merely cost-driven and that price pressures will moderate in the second half of the year. We continue to expect no change to OPR this year. Malaysia reported 1Q2017 GDP at greaterthan-expected growth of 5.6% yoy (against consensus +4.8% and previous quarter’s +4.5% yoy). Growth was underpinned by strong domestic demand; specifically private sector consumption (up 6.6% yoy versus 5.2% in 1Q2016) and private sector investment up 12.9% yoy (against +2.1% 1Q2016). In addition to rosier GDP data, bonds were also supported as Malaysia’s CPI was +4.4% yoy in Apr, which is a more benign number against consensus +4.5% and Mar +5.1% yoy respectively. The return of foreign investor’s appetite in domestic debt securities has become more evident as foreign inflows accelerated to a m-o-m increase of MYR10.1b in May (Apr: MYR6.8b). Foreign share of MGS rose to 41.8% (Apr: 39.7%). On a YTD basis foreign flows on debts remains negative but has narrowed to –MYR17.9b from –MYR26.8b in April. Money Market Outlook Bank Negara has kept the OPR unchanged at 3.00%, and has sounded pretty upbeat on growth. The central bank also sees inflation to moderate in the second half of the year. Hence, we reckon that there is no urgency for the central bank to hike rates to tame inflationary pressure, and expect policymakers to hold for the remainder of the year. At this juncture, we think highlight should be on the Jun FOMC, as the Fed will reveal its economic projections alongside the rate decision. Assuming Fed policymakers maintain their previous projection (target median Fed funds rate at 1.40% by end-2017), MYR bonds should see some profit taking activities especially after the recent rally. Furthermore, we reckon that the MYR bonds should see limited upsides unless Fed sounds dovish in the Jun FOMC. Money Market Fund Strategy The Fund will continue to place its funds primarily in a diversified portfolio of short-term money market and deposit-based instruments that are not subject to market valuation risks. In order to enhance the returns of the Fund, an active management process will be adopted, including active management of the maturities of the Fund’s holdings, continuous monitoring of the prevailing interest rates environment and to actively seek out the best rates and instruments available for the Fund. The Fund will continue to place its funds in bank placements and deposits. In order to enhance the returns of the Fund, an active management process will be adopted, including active management of the maturities of the Fund’s holdings, continuous monitoring of the prevailing interest rate environment and to actively seek out the best rates available for the Fund. The Fund will continue to invest in deposits and money market instruments. The investment strategy will involve actively managing the maturities of each investment to the extent possible to enhance the returns of the Fund. The Fund will also be actively managed to meet potential liquidity requirements of the Fund. The Fund will continue to invest in Shariah-based deposits and islamic money market instruments. The investment strategy will involve actively managing the maturities of each investment to the extent possible to enhance the returns of the Fund. The Fund will also be actively managed to meet potential liquidity requirements of the Fund. Kenanga Investors Berhad (353563-P) Level 14, Kenanga Tower, 237, Jalan Tun Razak 50400 Kuala Lumpur Tel: 03-2172 3000 Toll Free: 1800-88-3737 www.kenangainvestors.com.my 1 Strictly for Clients of Kenanga Investors Berhad
2. Kenanga Islamic Cash Fund June 2017 FUND PERFORMANCE (%) FUND OBJECTIVE The Fund seeks to provide Investors with regular income stream while maintaining capital stability. % Cumulative Return, Launch to 31/05/2017 12 10 Fund Category/Type Wholesale Money Market (Islamic) 8 6 Launch Date 11 June 2014 4 2 Kenanga Islam ic Cash : 10.99 May 17 Mar 17 Apr 17 Jan 17 Feb 17 Dec 16 Oct 16 Nov 16 Jul 16 Aug 16 Sep 16 May 16 Jun 16 Mar 16 Apr 16 Jan 16 Feb 16 Dec 15 Oct 15 Nov 15 Jul 15 Aug 15 Sep 15 May 15 Jun 15 Mar 15 Apr 15 Jan 15 Feb 15 Dec 14 Oct 14 Nov 14 Jul 14 Jun 14 Benchmark Maybank Overnight Repo Rate Aug 14 Sep 14 0 Trustee CIMB Islamic Commerce Trustee Berhad Maybank Overnight Repo Rate : 5.87 Source: Novagni Analytics and Advisory Sdn Bhd External Investment Manager / Designated Fund Manager Ahmad Tajuddin Bin Yeop Aznan CUMULATIVE FUND PERFORMANCE (%) # Period Fund Benchmark 1 month 0.29 0.15 6 months 1.51 0.88 1 year 3.36 1.81 3 years 5 years 5.87 Since Launch 10.99 Sales Charge Nil Annual Management Fee 0.30% p.a. Annual Trustee Fee 0.02% of the NAV of the Fund p.a. CALENDAR YEAR FUND PERFORMANCE (%) # Period Fund Benchmark 2016 3.63 1.92 2015 3.75 2.02 2014 1.86 1.09 2013 2012 - # Source: Lipper, 31 May 2017 FUND SIZE * RM 443.26 million Redemption Charge Nil NAV PER UNIT * RM1.0051 HISTORICAL FUND PRICE * Date Since Inception Highest RM 1.0097 31-May-16 Lowest RM 1.0000 11-Jun-14 Initial Offer Price RM1.00 per unit All fees and charges payable to the Manager and the Trustee are subject to GST as may be imposed by the government or other authorities from time to time. ASSET ALLOCATION (% NAV) * SECTOR ALLOCATION (% NAV) * May 100.00% April 100.00% March 100.00% Short Term Islamic Deposits and Cash 100.0% Liquidity PARENT CO. / COMPANY RAM RATING 1 2 3 4 5 A2 A3 AA1 AAA AA3 % of NAV 81.30% 12.10% 4.10% 1.50% 1.00% Date 31-May-17 26-Apr-17 31-Mar-17 DISTRIBUTION HISTORY * Gross Distribution RM Yield (%) 0.30 sen 0.30% 0.44 sen 0.44% 0.16 sen 0.16% Unit Split - * Source: Kenanga Investors Berhad, 31 May 2017 The Information Memorandum dated 11 June 2014 has been deposited with the Securities Commission Malaysia, who takes no responsibility for its contents. Investors are advised to read and understand the relevant Information Memorandum and consider the fees and charges involved before investing. Unit prices and distributions may go down as well as up. Where a distribution is declared, investors are advised that following the distribution, the NAV per unit will be reduced from cum-distribution NAV to ex-distribution NAV. A Fund’s track record does not guarantee its future performance. Investors are advised to read and understand the contents of the unit trust loan financing risk disclosure statement before deciding to borrow to purchase units. Kenanga Investors Berhad is committed to preventing Conflict of Interest between its various businesses and activities and between its clients / directors / shareholders and employees by having in place procedures and measures for identifying and properly managing any apparent, potential and perceived Conflict of Interest by making disclosures to Clients, where appropriate. The Manager wishes to highlight the specific risks of the Fund are interest rate risk and credit and default risk.