19 April 2024 Weekly Market Recap

5 min read     I     Date: 15 April 2024

Market Data

Asset Class Currency1-wk1-mthYTD2023

MSCI World USD-2.9%-4.0%2.8%21.7%
S&P 500 USD-3.1%-4.1%4.1%24.2%
Nasdaq USD-5.4%-5.5%1.3%53.8%
Stoxx 600-Europe EUR-1.2%-1.0%4.7%12.7%
MSCI Asia Pac ex-Japan USD-3.8%-3.1%-2.7%4.5%
ASEAN USD-3.7%-4.6%-4.0%0.7%
Shanghai Shenzhen CSI 300 Index CNY1.9%-1.0%3.1%-11.4%
Hang Seng Index HKD-3.0%-2.2%-4.9%-13.7%
Shanghai Stock Exchange Composite Index CNY1.5%0.1%3.0%-3.7%
FBMKLCI MYR-1.2%-0.7%6.7%-2.8%

Fixed Income
Bberg Barclays Global Agg Index USD0.2%0.6%-2.1%5.7%
JPM Asia Credit Index-Core USD0.2%1.4%1.7%9.9%
Asia Dollar Index USD0.0%-0.6%-2.3%-1.5%
Bloomberg Malaysia Treasury - 10 Years MYR0.1%0.4%1.1%6.4%

Top Performing Principal Funds
(1 month return as of 31 March 2024)
Equities   1-mth as of (31 March 2024)YTD as of (31 March 2024) 
Principal Islamic Malaysia Opportunities Fund   8.7%14.8% 
Principal Islamic Small Cap Opportunities Fund   8.2%15.9% 
Principal Islamic Enhanced Opportunities Fund   8.0%13.6% 
Principal Islamic Lifetime Balanced Growth Fund   4.0%8.2% 
Principal Lifetime Balanced Fund   3.9%8.0% 
Principal Lifetime Balanced Income Fund   3.5%7.9% 
Fixed Income      
Principal Islamic Lifetime Sukuk Fund   0.4%1.5% 
Principal Lifetime Bond Fund   0.4%1.4% 
Principal Islamic Lifetime Enhanced Sukuk Fund   0.4%1.3% 


Source: Bloomberg, market data is as of 19th April 2024.
*As we emphasise a long-term focus, the top performing funds were selected based on their monthly performance.
*The numbers may show as negative if there is no positive return for the period under review.
*The fund performance was referenced from the daily performance report, data was extracted from Lipper. 
*The performance figures are based on the fund’s respective currency class.
*Past performance is not an indication of future performance.                    

Market Review1

  1. Global financial markets were mostly in the red this week. In developed market, the United Stated, Europe, and Japan experienced negative returns. 
  2. Across Asia, performance was largely negative, with Taiwan and Thailand leading the decline, while China’s onshore market experience positive gains. In Malaysia, the FBMKLCI performed negatively, driven by the cautious sentiment in the regional market. 
  3. In bond market, US 10-year Treasury yields surpassed the 4.50% mark as investors re-evaluate future interest rate trajectories. The latest persistent inflation data suggests that fewer than two rate cuts are now anticipated.

Macro Factors

  1. In the US, the federal policymakers have recently provided new guidance regarding the direction of interest rate cuts, indicating that the current economic data does not warrant sufficient confidence for an immediate change in policy. Meanwhile, retail sales rose 0.7% month-over-month in March, surpassing forecast of 0.3% and following an upwardly revised 0.9% gain in February, suggesting consumer spending remains robust. 2
  2. In Europe, the annual inflation figure was confirmed at 2.4% year-on-year in March, matching November's 28-month low and slightly exceeding the European Central Bank's target of 2%. On trade, the trade surplus significantly widened to €23.6 billion in February from €3.6 billion in the same period last year, attributed to substantial growth in exports of food and raw materials. Furthermore, industrial production rebounded by 0.8% month-over-month in February, higher than the 3.0% downturn in January. 3
  3. In China, the economy advanced 5.3% year-on-year in first quarter of 2024, exceeding market forecasts following a 5.2% growth in the prior period. It was the steepest yearly expansion since 2nd quarter of 2023, lifted by continued support measures from Beijing and spending related to the Lunar New Year festival. Meanwhile, industrial production grew by 4.5% year-on-year in March, softer than the 7% growth in January-February combined, attributed to the weaker growth across all activities. Additionally, retail sales rose by 3.1% year-on-year, falling short of market forecasts and notably decelerating from the 5.5% growth observed in the previous period. 4
  4. In Malaysia, the economy expanded 3.9% year-on-year in the first quarter of 2024, accelerating from a 3.0% growth in the previous period. This marked the fastest economic expansion in exactly a year, driven by positive contributions from all sectors, with services sector leading the way. On trade, trade surplus narrowed sharply in March as exports decline while imports surged. Imports increased to 12.5% year-on-year, driven by higher purchases of intermediate goods, capital goods, and consumption goods. 5

Investment Strategy6

The recent rise in volatility, attributed to elevated geopolitical risk and markets adjusting to a likely delay in the start of US rate cuts, highlights the importance of diversification and the need to focus on quality. We advocate for a balanced allocation in both equity and fixed income, with a preference for quality and income attributes to enhance portfolio resilience. We are exercising caution with USD assets and believe that Asian equities and fixed income offer more value in the short term.

  1. We find bonds appealing as we perceive that the central bank’s hiking cycle have reached its peak. We also see potential for capital gains in the event of weaker economic growth. Therefore, we maintain our preference for investment grade bonds with longer durations as our preferred investment choice. For Malaysia, the projected improvement to the budget deficit, provided in the Budget 2024, improved the outlook for domestic bonds.
  2. On equities, we prefer quality and dividend-paying stocks for their defensive characteristics, which can provide resilience in the face of uncertain macroeconomic and geopolitical conditions. Our positive outlook is focused on Asia and includes strategic positions in various areas: a) the bottoming tech hardware cycle, b) long-term growth potential driven by low penetration rates (such as India), c) recovery plays and structural themes in ASEAN, d) selective sectors benefiting from China's reopening, and e) Malaysia's growing optimism due to political stability and potential gains from the New Energy Transition Roadmap, the New Industrial Master Plan 2030 and projected improvement to the budget deficit detailed in the Budget 2024.
  3. We also favor income-focused approach to ride out volatilities arising from geopolitical tensions, inflationary issues, and concerns of economic slowdown.  


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1 Bloomberg, 19 April 2024  
2 Bloomberg, Bureau of Labor Statistics (BLS), ISM, S&P Global, US Federal Board, 19 April 2024
3 S&P Global, ECB, Factset, Bank of England (BoE), 19 April 2024
4 Bloomberg, National Bureau of Statistic China, CEWC, 19 April 2024
5 Department of Statistic Malaysia, S&P Global, 19 April 2024
6 Principal view, 19 April 2024

*PMI stands for Purchasing Manufacturing Index
*HCOB refers to Hamburg Commercial Bank
*NBS PMI refers to official data released by National Bureau of Statis in China
*Caixin PMI refers to data published by Caixin Media and ISH Markit. It provides alternative gauge focusing on smaller and medium-sized enterprises.
*ECB refers to European Central Bank
*PBOC refers to People’s Bank of China
*PCE refers to Personal Consumption Expenditure

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Disclaimer: We have based this document on information obtained from sources we believe to be reliable, but we do not make any representation or warranty nor accept any responsibility or liability as to its accuracy, completeness, or correctness. Expressions of opinion contained herein are those of Principal Asset Management Berhad only and are subject to change without notice. This document should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell Principal Asset Management Berhad’s investment products. The data presented is for information purposes only and is not a recommendation to buy or sell any securities or adopt any investment strategy. This material is not intended to be relied upon as a forecast, research, or investment advice regarding a particular investment or the markets in general, nor is it intended to predict or depict performance of any investment. We recommend that investors read and understand the contents of the funds’ prospectus and product highlights sheet available on the Principal website, which have been duly registered with the Securities Commission Malaysia (SC). Registration of these documents does not amount to nor indicate that the SC has recommended or endorsed the product or service. There are risks, fees and charges involved in investing in the funds. You should understand the risks involved, compare, and consider the fees, charges and costs involved, make your own risk assessment, and seek professional advice, where necessary. This article has not been reviewed by the SC.