8 March 2024 Weekly Market Recap

5 min read     I     Date: 11 March 2024

Market Data

Asset Class Currency1-wk1-mthYTD2023

MSCI World USD0.5%3.6%6.7%21.7%
S&P 500 USD-0.2%2.6%7.5%24.2%
Nasdaq USD-1.5%1.4%7.2%53.8%
Stoxx 600-Europe EUR1.3%3.9%5.3%12.7%
MSCI Asia Pac ex-Japan USD2.0%5.1%1.7%4.5%
ASEAN USD2.5%3.1%0.9%0.7%
Shanghai Shenzhen CSI 300 Index CNY0.2%5.3%3.2%-11.4%
Hang Seng Index HKD-1.0%3.4%-3.8%-13.7%
Shanghai Stock Exchange Composite Index CNY0.6%6.3%2.3%-3.7%
FBMKLCI MYR0.2%1.9%5.8%-2.8%

Fixed Income
Bberg Barclays Global Agg Index USD1.4%1.7%-1.1%5.7%
JPM Asia Credit Index-Core USD0.9%1.3%1.5%9.9%
Asia Dollar Index USD0.5%0.4%-1.3%-1.5%
Bloomberg Malaysia Treasury - 10 Years MYR0.3%0.3%1.0%6.4%

Top Performing Principal Funds
(based on 1 month's performance)
Equities   1-mth as of (29 Feb 2024)YTD as of (29 Feb 2024) 
Principal China Direct Opportunities Fund - 
Class MYR
Principal Biotechnology Discovery Fund - 
Class USD
Principal Global Millennial Equity Fund - Class USD   8.35%11.65% 
Fixed Income      
Principal Islamic Lifetime Sukuk Fund   0.52%1.08% 
Principal Lifetime Bond Fund   0.45%0.97% 
Principal Sustainable Dynamic Bond Fund - 
Class MYR


Note: Feeder fund’s data has been updated. Fund ranking has been adjusted accordingly.


Source: Bloomberg, market data is as of 8 March 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. The global financial markets concluded the week with majority experiencing positive returns. In developed markets, Europe witnessed significant gains, while the United States and Japan saw declines.  
  2. Across Asia, overall market performance was positive, with Taiwan leading gains, followed by Korea and Thailand. In Malaysia, the FBMKLCI had a marginal gain, driven by the positive sentiment for equities.  
  3. Turning to the bond market, the 10-year U.S. Treasury note experienced a marginal gain, with yields stabilizing in the 4.1% range. This comes as investors assessed the future path of interest rates following the recent tick up in unemployment rate in February jobs report. (Bond prices move in the opposite direction of bond yields).

Macro Factors

  1. In the US, the ISM Services PMI fell to 52.6 in February from a four-month high of 53.4 in January. The decline was driven by lower growth in the services sector amid faster supplier deliveries. During the week, the central bank chair made a new remark regarding the monetary policy, indicating that the policy rate has reached the peak of the cycle, but reinforced that the Fed is not ready to begin reducing rates. 2
  2. In Europe, the HCOB* services PMI* was revised higher to 50.2 in February from a preliminary estimate of 50. This points to the first, albeit small expansion in the services sector in seven months. Retail sales rose by 0.1% month-over-month in January, following a revised 0.6% contraction in December and in line with market expectations. The improvements were driven by increased sales of food, drinks, and tobacco. The European Central Bank maintain interest rates at 4.5% during its March meeting, as policymakers balanced concerns over a looming recession with persistently elevated underlying inflationary pressures.3
  3. In China, the recently concluded National People’s Congress meeting set a 5% GDP growth target for 2024 and reiterated ongoing supports for the economy. The meeting also outlined key priorities, including 1) Promoting new consumption in digital, green, and healthy sectors; 2) Integrating digital technology with the real economy; 3) Emphasising affordable housing and optimizing supply demand balance; and 4) maintaining focus on green and low carbon development. Exports surged 7.1% year-on-year in the combined period of January-February, following a 2.3% gain in December 2023, signalling a positive start of global trade.4
  4. In Malaysia, Bank Negara kept its overnight policy rate steady at 3% for the fifth consecutive meeting in March, matching market expectations. The board noted that the current monetary policy stance remains supportive of the economy and is consistent with the current assessment of the inflation and growth prospects.5

Investment Strategy6

We advocate a balanced allocation in both equity and fixed income, with a preference for income-focused funds. Our strategy emphasises quality, growth, and income in stocks and credits. We are exercising caution with USD assets and believe that Asian equities and fixed income present more value in the short term.

  1. We find bonds appealing as we perceive that the central bank’s hiking cycle may 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 favour income-focused approach to ride out volatilities arising from geopolitical tensions, inflationary issues, and concerns of economic slowdown.  


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1 Bloomberg, 8 March 2024  
2 Bloomberg, Bureau of Labor Statistics (BLS), ISM, S&P Global, US Federal Board, 8 March 2024
3 S&P Global, ECB, Factset, Bank of England (BoE), 8 March 2024
4 Bloomberg, National Bureau of Statistic China, CEWC, 8 March 2024
5 Department of Statistic Malaysia, S&P Global, 8 March 2024
6 Principal view, 8 March 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.