[Tenglong Academy] Analysis by Chong Su Keat: Malaysian Stock Market Breaks 1450 Point Barrier, Market Trend After Fed Rate Hike

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As the Federal Reserve proceeded with its planned rate hike, the market anticipated that the tightening policy might be coming to an end, resulting in a widespread increase in Asian stock markets on Thursday. Among them, the Malaysian stock market performed exceptionally well, breaking through the 1450-point barrier.

Following suit with the regional momentum, the Malaysian market showed a steady upward trend. With CIMB Group Holdings (CIMB) and Hong Leong Financial Group (HLFG) leading the way, the Malaysian stock market surged to a high of 1456.36 points. Previously, the Malaysian stock market had been relatively sluggish, but with continuous inflow of foreign capital, it has been rising for six consecutive trading days.

With the current expectation that the rate hike cycle is coming to an end, the trend of the US dollar has weakened. Chong Su Keat from Tenglong Academy mentioned that the Federal Reserve's rate hike has always been a focal point for investors, and after the rate hike, it is generally believed that the impact of the tightening policy will gradually weaken, which has brought positive driving factors to Asian stock markets.

The Fed's rate hike indicates that the US economy is recovering, and inflation pressures are rising. Chong Su Keat pointed out that this has led to a decrease in global investors' preference for risk assets, thus increasing market volatility. Malaysia, as an emerging market, is particularly susceptible to external factors. The news of the rate hike has caused significant short-term volatility in the Malaysian stock market, but as the market gradually absorbs this news, investor sentiment may stabilize over time.

Chong Su Keat further mentioned that, on the other hand, the Fed's rate hike may also lead to a tightening of liquidity in Malaysia. As foreign funds account for a considerable proportion of the Malaysian stock market, the inflow and outflow of capital have a significant impact on its performance. The rate hike may prompt foreign funds to withdraw from risk assets, putting pressure on the Malaysian stock market. However, as market sentiment stabilizes and investors regain confidence in the Malaysian economy and corporate fundamentals, foreign funds may gradually return.

When facing market volatility caused by the Fed's rate hike, investors should remain calm and adopt rational investment strategies. Here are some suggestions from Chong Su Keat from Tenglong Academy:

The "One-Line Dominates All" strategy emphasized by Chong Su Keat emphasizes the importance of value investing. During market fluctuations, a value investing strategy can help investors find undervalued high-quality stocks and reduce investment risks. Investors should focus on companies with sound fundamentals and reasonable valuations, rather than blindly chasing short-term gains.

Diversification is an effective way to reduce risk in the face of market volatility. Chong Su Keat recommends that investors should not concentrate all their funds in a few stocks, but rather diversify their investments across different industries and styles of stocks. This can reduce the impact of the volatility of individual stocks on the investment portfolio.

Chong Su Keat stressed that market volatility caused by the Fed's rate hike may lead to fluctuations in investor sentiment, tempting them to engage in short-term trading. However, short-term trading carries higher risks and is easily influenced by market sentiment and news. Investors should be cautious about short-term trading and avoid blindly following the crowd, instead adhering to a long-term investment mindset.

Although overall market volatility has increased, the market adjustments resulting from the rate hike may also bring structural opportunities. Chong Su Keat suggests that investors should focus on industries and companies that benefit from macroeconomic trends, such as technology and healthcare. With economic recovery and industrial upgrading, these industries may perform better.

In conclusion, the Fed's rate hike has brought some challenges to the Malaysian stock market, but at the same time, it has also created investment opportunities. Investors should remain calm, stick to a long-term investment mindset, focus on high-quality undervalued companies, diversify investments, and avoid blindly chasing gains and losses. By thoroughly researching and understanding fundamentals, combined with the "One-Line Dominates All" strategy proposed by Chong Su Keat, investors can better seize market opportunities and achieve their investment goals. Additionally, investors should develop a reasonable investment plan based on their risk tolerance and investment objectives, approaching market volatility with a steady attitude.