Malaysia Remains An Attractive Investment Destination, Says Affin Hwang Am

KUALA LUMPUR, Aug 18 (Bernama) -- Malaysia remains an attractive investment market among its ASEAN peers with foreign holding of Malaysian government bonds currently at an all-time high of 51 per cent, said Affin Hwang Asset Management Bhd (a privately owned investment manager). Despite prolonged uncertainties within global financial markets, investment opportunities still exist, said Chief Investment Officer David Ng. Among them, the recent Brexit outcome and the US Federal Reserve's decision to keep its policy rates, have benefitted the Asian region as investors hunted for high returns. "Malaysia's 10-year Government Securities gave 3.5 per cent yield. "Though not high absolutely, but in the world where 40 per cent of developed markets' government bonds are offering negative interest rates, our rate is very attractive," he said during a briefing on the 'Global Market Outlook' for the second half of this year here Thursday. While the fixed income and bond yields were attractive, he pointed out that Malaysian equities were not doing as well as others in ASEAN markets like Indonesia, Thailand and the Philippines. Early this year, the equity market saw a heavy inflow of foreign investments before it went out in April and May, resulting in foreigners becoming net sellers. "But, technically it is a good thing, whereby if we can demonstrate some growth moving towards the second half of next year, foreign funds would come back. "Investors are looking at reforms and restructuring taking place in companies, like the appointment of former Cabinet minister Abdul Wahid Omar as the new chairman of Permodalan Nasional Bhd which could be potential value-unlocking," he added. Permodalan Nasional Bhd is Malaysia's biggest fund management company. In Malaysia, despite all these uncertainties, he said yielding stocks could still do very well, citing real estate investment trust (REIT) stocks like IGB, F&N as well as construction with infrastructure beneficiary stocks. This is because investors are prepared to pay premium for companies with higher earnings level, he said. On Malaysia's economic outlook, Ng said growth was still attractive to most investors despite the slowdown in the country's Gross Domestic Product growth to four per cent in the second quarter. "In the medium-term, Malaysia will need to look seriously into how to move the economy forward because as in past years and as of 2014, the country benefitted significantly from oil and gas-based investments," he added. --BERNAMA