QUESTION 4 (18 MARKS)

Alisa has an extreme with Jay-Lo stock. Before Covid 19, its price was at RM3.20 and in March 2021 after the Prime Minister (PM) announced of Movement Control Order (MCO), its price reduced to RM2.80. In May 2021, the PM has announced that few sectors/industries can continue their operations. And its price hiked to RM5.35. Jay-Lo stock is in ACE market in Bursa Malaysia and it is a high technology company.

Compare to other companies such as airline industry, hotels industry and construction industry they are bad affected due to this pandemic. Alisa is really concern with the economic changes either locally or globally. As a financial consultant, you have a wide experience during contraction and expansion of polices. You have to know the objective of Alisa invest in the stock market either to be an active or conservative investor. Or either she is taker, risk averse or risk neutral. Alisa has RM250,000 in her savings and she planned to invest 30% of her funds in stock market.

Required:

Propose to Alisa on how to analyse the stock according to fundamental or technical analysis. Either by used top down or bottom up approach. Besides you have to know Alisa background, objectives and suggest asset allocation in portfolio. Its better diversified instead of buying single asset. Your proposal may suggest any stock(s), bonds, derivatives and unit trust from sector or industry with valid reasons. You have to justify to Alisa the benefits of diversification and the market that you propose to her. Conclude your proposal with the return may earns from the market.