1

MARKET WRAP: WEEK ENDED 21 March14

Weekly Highlights: Markets Closed Mixed on Concerns over U.S. Interest Rate Outlook
Stockmarket Commentary

After a firm start, the FBM KLCI eased by 0.2% on
Wednesday in line with offshore markets following
the Federal Open Market Committee (FOMC)
meeting on 19th March. However, selective buying
of blue chip stocks helped the FBM KLCI to recover
its losses and closed at 1,820.5 points for a gain of
0.9% for the week.

Average daily trading volume decreased to 1.5 bil
shares from 1.6 bil shares as compared to the
preceding week while average daily turnover
declined to RM2.0 bil from RM2.1 bil over the
same period.

Regional markets traded on a mixed note. The China
H shares market registered a weekly gain of 1.4%
on speculation that the government may loosen
funding restrictions on property developers.
However, comments made by Federal Reserve chair
Janet Yellen about the timing of future interest rate
hikes caused selected regional markets to pull back.

Wall Street: The Dow eased following comments
by Federal Reserve chair Janet Yellen that the
Federal funds rate may be raised six months after
the end of the current bond-buying program.
However, sentiment improved following news that
the Conference Boards Leading Economic Index
was sustained at a growth of 4.7% in February
compared to January. The Dow rose by 1.5% to
close at 16,302.8 points while the Nasdaq gained
0.7% to 4,276.8 points for the week.

U.S. Economy: U.S. economic data was mixed with
housing starts sustained at 907,000 units on an
annualized basis in February 2014 compared to a
revised 909,000 units in January 2014.

Meanwhile, the U.S. inflation rate eased to a 4-
month low of 1.1% in February 2014 from 1.6% in
January 2014 amid lower housing and transportation
costs.




At the FOMC meeting on 18th and 19th March
2014, the FOMC decided to reduce its monthly
bond-buying program further from US$65 bil to
US$55 bil from April 2014. The Federal Reserve
chair Janet Yellen noted that the slowdown in
U.S. economic activities in early 2014 was partly
due to harsh weather conditions.

Local Economy: Bank Negara Malaysia (BNM)
projects Malaysias GDP growth to range
between 4.5% and 5.5% in 2014 on the back of
higher investment spending and a moderate
improvement in exports.

Malaysias inflation rate inched up to a 32-month
high of 3.5% in February 2014 from 3.4% in
January 2014 due mainly to higher prices for
utilities and transportation. For the whole of
2014, BNM projects the inflation rate to range
between 3%-4% compared to 2.1% in 2013.

Malaysias change in CPI by key components
Item (Weight) Jan 2014 Feb 2014
Utilities (22.6%) 3.2 3.5
Transport (14.9%) 5.3 5.5
Food (30.3%) 4.2 3.8
Overall CPI 3.4% 3.5%

Market Outlook & Valuations: Looking ahead,
investors are expected to remain focused on the
macroeconomic variables released by the U.S.
and regional economies. In tandem with the
Federal Reserves tapering timeline for 2014, the
impact of potentially higher U.S. interest rates on
global and regional economies will also be
monitored in the latter half of 2014.

As at 21st March 2014, the local stock market is
trading at a prospective P/E of about 17.1x which
is above its 10-year average P/E ratio of 16.5x.
The local markets dividend yield of 3.25% is
higher than the 12-month fixed deposit rate of
3.15%.


After easing by 0.2% on Wednesday, the FBM KLCI subsequently recovered its losses and closed at
1,820.5 points to register a weekly gain of 0.9%.
Regional markets traded on a mixed note amid caution regarding the Federal Reserves outlook for
interest rates.
Looking ahead, investors are expected to remain focused on the macroeconomic variables released by the
U.S. and regional economies.


For Internal Circulation Only
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Regional Markets Valuations

Prospective
P/E (x)
Estimated
Dividend
Yield (%)
Australia 14.94 4.54
China H Shares 6.47 4.89
Hong Kong 9.82 3.97
Thailand 12.92 3.61
Taiwan 14.54 3.24
Singapore 13.74 3.43
Shanghai Comp 7.85 3.65
Philippines 17.66 2.30
Indonesia 14.69 2.07
Japan 13.72 1.96
South Korea 9.24 1.38
Source: Bloomberg, 21 Mar14




































































Market Performance and Valuations

Selected Markets Weekly Performances
21 Mar14 14 Mar14 % chng
FBM KLCI 1,820.5 1,805.1 +0.9
FBMS Shariah 12,935.5 12,814.3 +0.9
MSCI FEXJ
#
497.5 500.9 -0.7
MSCI World
#
404.4 401.4 +0.7
Dow Jones 16,302.8 16,065.7 +1.5
Nasdaq 4,276.8 4,245.4 +0.7
TOPIX 1,146.0^ 1,164.7 -1.6
SH Comp 2,047.6 2,004.3 +2.2
China*,H share 9,427.3 9,298.6 +1.4
MSCI China 5,815.4 5,790.7 +0.4
Hong Kong 21,436.7 21,539.5 -0.5
Taiwan 8,577.2 8,687.6 -1.3
South Korea 1,934.9 1,919.9 +0.8
Singapore 3,073.4 3,073.7 -0.01
Thailand 1,360.5 1,372.2 -0.9
Indonesia 4,700.2 4,878.6 -3.7
* Hang Seng China Enterprises Index
# in USD
^As at 20 March14

Bursa Securities Market Valuations^
21 Mar14 14 Mar14 10 yr av.*
FBM KLCI 1,820.48 1,805.12 -
PER (x) 17.10 16.95 16.46
Price/NTA(x) 3.15 3.13 3.25
3mth InterBk 3.32% 3.31% 3.16%
12mth FD, % 3.15% 3.15% -
*2005-2014 average
^PMB in-house Statistics


Malaysias Economic Snapshot
2012 2013 2014F
GDP growth, % 5.6 4.7 5.0
Inflation, % 1.6 2.1 3.0-3.5
F= PMB in-house forecasts

Performance of Equity and Balanced Funds*

Local Funds
21 Mar14 14 Mar14 % chng
PSF 0.5845 0.5805 +0.7
PGF 0.5192 0.5165 +0.5
PIX 0.7233 0.7180 +0.7
PIF 0.5341 0.5303 +0.7
PAGF 0.6870 0.6802 +1.0
PRSF 0.7038 0.6995 +0.6
PBF 0.6957 0.6894 +0.9
P SmallCap 0.8891 0.8848 +0.5
PEF 0.2896 0.2883 +0.5
PFSF 0.2780 0.2776 +0.1
PDSF 0.3208 0.3197 +0.3
PSSF 0.3146 0.3128 +0.6
PSA30F 0.3340 0.3311 +0.9
POGF 0.3316 0.3296 +0.6
PBBF 0.8189 0.8157 +0.4
PBGF 0.8251 0.8195 +0.7
PBGSQF 0.2995 0.2976 +0.6
PSSCF 0.3167 0.3130 +1.2
PBMAC 0.2586 0.2578 +0.3
PBBSQF 0.2541 0.2532 +0.4

Local Islamic Funds
21 Mar14 14 Mar14 % chng
P Ittikal 0.9468 0.9379 +0.9
PIEF 0.3824 0.3794 +0.8
PIOF 0.3977 0.3965 +0.3
PIMXAF 0.2886 0.2865 +0.7
PIDF 0.4054 0.4022 +0.8
PISSF 0.3037 0.3008 +1.0
PISTF 0.3429 0.3414 +0.4
PIOGF 0.3115 0.3091 +0.8
PISEF 0.4291 0.4256 +0.8
PIA40GF 0.2901 0.2863 +1.3
PISVF 0.2942 0.2920 +0.8
PITGF 0.3341 0.3307 +1.0
PITSEQ 0.3049 0.3009 +1.3
PBIEF 0.2736 0.2720 +0.6
PISGIF 0.2513 0.2502 +0.4

Foreign Funds
21 Mar14 14 Mar14 % chng
PFES 0.2347 0.2344 +0.1
PRSEC 0.2226 0.2234 -0.4
PGSF 0.2490 0.2460 +1.2
PFEDF 0.2073 0.2073 -
PFEBF 0.2249 0.2242 +0.3
PTAF 0.2233 0.2228 +0.2
PCSF 0.1695 0.1694 +0.1
PFEPRF 0.2926 0.2940 -0.5
PSEASF 0.2853 0.2869 -0.6
PFECTF 0.2868 0.2844 +0.8
PCTF 0.2241 0.2234 +0.3
PFETIF 0.3211 0.3190 +0.7
PNREF 0.2304 0.2292 +0.5
PAUEF 0.2937 0.2876 +2.1
PFA30F 0.2385 0.2388 -0.1
PINDOSF 0.2617 0.2712 -3.5
PBAEF 0.2311 0.2301 +0.4
PBADF 0.2998 0.3015 -0.6
PBEPEF 0.2058 0.2038 +1.0
PBCPEF 0.1639 0.1623 +1.0
PBCAEF 0.2489 0.2468 +0.9
PBCAUEF 0.1996 0.1960 +1.8
PBSGA30EF 0.2700 0.2692 +0.3
PBAPENTF 0.2401 0.2400 +0.04
PBAREIF 0.2873 0.2869 +0.1
PBADBF 0.2925 0.2885 +1.4
PBINDOBF 0.2450 0.2505 -2.2
PSGEF 0.2669 0.2661 +0.3
PBAEGF 0.2772 0.2764 +0.3
PBDYNAF 1.1155 1.1095 +0.5

Foreign Islamic Funds
21 Mar14 14 Mar14 % chng
PAIF 0.2735 0.2715 +0.7
PIADF 0.2740 0.2725 +0.6
PIATAF 0.2522 0.2494 +1.1
PCIF 0.1972 0.1952 +1.0
PIALEF 0.2528 0.2517 +0.4
PBIAEF 0.2353 0.2333 +0.9
PBIASSF 0.2017 0.2005 +0.6
*Buying Price




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Bond Market Commentary

For the fortnight ended 21st March 2014, the
U.S. Treasuries (UST) generally ended on a
softer note as the Federal Reserve indicated
that the Fed funds rate may be raised about 6
months after the monthly bond purchase
program ends. This brings the first potential
Fed rate hike into 1H 2015 which is at a
quicker pace than indicated earlier.
Meanwhile, as broadly expected, the Fed
announced that it will taper its monthly bond
purchase program by another US$10 billion
to US$55 billion in April. The 3-year and 5-
year U.S. Treasury yields rose by 12 basis
points (bps) and 7 bps respectively to 0.89%
and 1.71%, while the 10-year U.S. Treasury
yield fell by 5 bps to 2.74% over the
fortnight.

In the Ringgit bond market, the Malaysian
Government Securities (MGS) yields ended
higher amid some selling pressure post
Yellens hawkish statement after the FOMC
meeting. Meanwhile, Malaysias February
CPI rose to 3.5% from 3.4% in January due
to spillover effects from the subsidy
rationalisation measures introduced last year.
The 3-year MGS yield rose 17 bps to 3.39%,
5-year MGS yield remained unchanged at
3.59% while the 10-year MGS yield inched
up 1 bp to 4.11% over the same period.

The local corporate bond market saw
selective buying of high investment grade
bonds. The 3-year and 10-year AAA-rated
corporate bond yields inched up 1 to 2 bps to
close at 3.99% and 4.95% respectively while
the 5-year AAA-rated corporate bond
remained unchanged at 4.32%.

In the money market, the spread of the 3-
month Kuala Lumpur Interbank Offer Rate
(KLIBOR) over the 3-month U.S. Treasury
bill rate widened to 327 bps from 326 bps
over the fortnight as the 3-month U.S.
Treasury bill rate remained unchanged at
0.05% while the 3-month KLIBOR inched
up 1 bp to close at 3.32% over the same
period.

Looking ahead, the U.S. Treasury bond
market is expected to remain volatile over
the medium term as liquidity is anticipated to
tighten amidst the continuing tapering of the
Feds stimulus program.

BOND MARKET REVIEW:
FORTNIGHT ENDED
21 March 14
Public Mutual's Bond Funds Performance
21 Mar14 7 Mar14 % chng
P BOND 0.9745 0.9735 +0.1
PI BOND 1.0172 1.0166 +0.1
PIN BOND 1.0093 1.0076 +0.2
PEBF 1.0244 1.0253 -0.1
PSBF 1.0294 1.0282 +0.1
PIEBF 1.0759 1.0748 +0.1
PISBF 1.0296 1.0287 +0.1
PIINCOME 1.0436 1.0427 +0.1
PBFI 1.0502 1.0488 +0.1
PBIBF 1.1821 1.1812 +0.1
PBBMTN1 1.0398 1.0384 +0.1
PBINFBF 1.0591 1.0582 +0.1
PIINFBF 1.0294 1.0284 +0.1
PSTBF 1.0342 1.0332 +0.1
PISTBF 1.0372 1.0361 +0.1
PSKF 1.0274 1.0264 +0.1
PBBOND 1.0264 1.0257 +0.1
PBSKF 1.0229 1.0225 +0.04
PENTBF 1.0035 1.0029 +0.1
PBASF 1.0072 1.0062 +0.1

Public Mutual's Money Market Funds Performance
21 Mar14 7 Mar14 % chng
PMMF 0.9940 0.9929 +0.1
PIMMF 1.0406 1.0394 +0.1
PBCMF 1.0315 1.0303 +0.1
PBCPF 1.0024 1.0013 +0.1
PBICMF 1.0294 1.0283 +0.1
PBICPF 1.0028 1.0017 +0.1
^Adjusted for Distribution















Change in Interest Rates & Bond Yields
(in %) 21 Mar14 7 Mar14 Chng*
3 Month Interest Rates
KLIBOR 3.32 3.31 +1
U.S. T Bill 0.05 0.05 -
3 Year
U.S. T Note 0.89 0.77 +12
MGS 3.39 3.22 +17
'AAA' Corp 3.99 3.98 +1
5 Year
U.S. T Note 1.71 1.64 +7
MGS 3.59 3.59 -
'AAA' Corp. 4.32 4.32 -
10 Year
U.S. T Bond 2.74 2.79 -5
MGS 4.11 4.10 +1
'AAA' Corp. 4.95 4.93 +2
*in basis points
MGS Yield
2.4
2.6
2.8
3.0
3.2
3.4
3.6
3.8
4.0
4.2
4.4
Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14
3 Years MGS 10 Years MGS

US Treasury Bond Yield
1.2
1.6
2.0
2.4
2.8
3.2
3.6
4.0
Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14
10 Years US T Bond

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You are advised to read and understand the contents of the Master Prospectus of Public Series of Funds dated
30
th

April 2013 and expires on 29
th

April 2014, Master Prospectus of Public Series of Shariah-Based Funds
dated 30
th

April 2013 and expires on 29
th

April 2014, Master Prospectus of PB Series of Funds dated 30
th

April 2013 and expires on 29
th

April 2014, Information Memorandum of PB Cash Plus Fund and PB Islamic
Cash Plus Fund dated 29
th
March 2013, Information Memorandum of PBB MTN Fund 1 dated 10
th

November
2009 and expires on 24
th
December 2009, Prospectus of PB Balanced Sequel Fund and PB Aiman Sukuk
Fund dated 10
th
September 2013 and expires on 29
th
April 2014 and Prospectus of Public Islamic Growth &
Income Fund dated 7
th
January 2014 and expires on 29
th
April 2014. These prospectuses have been registered
with the Securities Commission who takes no responsibility for their contents, and neither should their
registration be interpreted to mean that the Commission recommends the investment.

You should note that there are fees and charges involved; and that the prices of units and distribution payable,
if any, may go down as well as up. Applications to purchase must come in the form of a duly completed
application form referred to in and accompanying the prospectus. A copy of the prospectus can be obtained
from your attending agent, corporate representative or nearest Public Mutual Office.

Past performance should not be taken as an indication of future performance.
Public Mutual Berhad (23419-A)
Block B, Sri Damansara Business Park, Persiaran Industri, Bandar Sri Damansara, 52200 Kuala Lumpur, Malaysia. P.O. Box 10045, 50700 Kuala Lumpur
Tel: 03-62796800 Fax: 603-62779800 Website:http://www.publicmutual.com.my