After several months of dire market sentiment, I believe many investors are feeling frustrated, impatient, numb and to the extreme, lost hope. What have been on the strong trend comes to an end all of a sudden, especially in May2021. From glove makers, semiconductors, commodities, ICT, many of them had deep retracement, some even retraced more than 50%. Of course, the major event for Malaysia market was Serba Dinamik, where we saw its share price slumped as much as 80% from RM1.60 due to the controversy. And this is pretty much the market for the past 6 months.
Moving into July 2021, sentiment turned a little bit better, where we saw some small-cap counters surged more than 100%. Those involved in IT, shipping & semicon are back in radar of investors. However, the mere positive sentiment was again clashed by our domestic problems, particularly on political instability and spike in Covid-19 cases where daily confirmed cases is again approaching 10,000 which led to MCO after MCO and EMCO after EMCO.
Moving forward, how will the market move? Well, I guess there’s still some opportunities but it won’t be like last year’s rally across the board. Still, I guess KLCI will not have any good performance and I guess small cap & mid-cap stocks are the ones to focus on in search of possible “black horse”. Some of the criteria that I will personally use are as follows.
- Companies that show growing profit (prefer historical high quarter earnings)
- Companies that will possibly be in the hot theme like 5G, cyber security, semiconductor related & electronic manufacturing service sector.
- Consumer goods & real-estate management companies that have proven pre-pandemic track records. (recovery play)
Well, some say, the above is already half the counters of Bursa. My answer is, of course lah….so easy ah? Also, technical analysis comprise a large part for some elites in timing their trades, it can also help further narrow down the scope of stock picking.
Conclusion, some are shouting for burst of bubble, 2nd crisis after 2020, stock market will collapse bla bla bla. Well it might be true, and this is also the risk ones have to bear to be in the stock market. While there are still companies managed to report growth in their earnings, I will see it as a chance rather than a risk. And finally, let’s hope for a better second half of 2021.