UOBAM Malaysia Forecasts Malaysia GDP Growth To Pick Up In 2nd Half

KUALA LUMPUR, Sept 2 (Bernama) -- UOB Asset Management (M) Bhd (UOBAM Malaysia) has projected Malaysia's gross domestic product (GDP) growth to pick up in the second half of this year. Chief Executive Officer, Lim Suet Ling, said this was underpinned by rising consumer sentiment and infrastructure spending. "We also expect Malaysia, a major oil-exporting country, to benefit from higher oil prices following expectations of more balanced supply and demand levels over the next 12 months," she said in a statement Monday. She said the prospects for the domestic stock exchange were also better this year as compared with last year on improved micro and macro factors. "Some factors that were a drag on the market last year, namely the weak ringgit, low oil prices, muted consumer sentiment, uncertainty in China and foreign portfolio outflows, are showing signs of improvement," she said. Furthermore, she said, Malaysia could see positive impact from foreign portfolios looking for a laggard play. Lim said the recent strengthening of the ringgit and stabilising oil prices were expected to positively influence Malaysia's domestic bond market. "The continued monetary stimulus by global central banks could provide further support to local bond yields," she said. However, she said, a potential interest rate increase by the US Federal Reserve might pose a headwind in the near term. Regionally, she said, Asian markets continued to look attractive given Asia's potential, favourable demographics and rising income, and these structural trends should deliver investment opportunities for astute investors in the long term. She said Asian equity valuations were attractive and Asian bonds had presented some good occasions to lock in favourable yields over the long term. Lim said UOBAM Malaysia remained positive on the longer-term outlook for the consumer and technology sectors which benefited from exposure to strong domestic demand and e-commerce growth in the emerging economies. "We also see opportunities within niche segments across high-growth industries," she said. She said rising Internet and smartphone penetration was expected to accelerate technological disruption across various sectors including retail, financial services, travel and transportation. On ASEAN, Lim said, the under-development in infrastructure in member states presented investment opportunities in the infrastructure sector. She said the United Nations Conference on Trade and Development estimated that ASEAN would need at least US$110 billion (US$1=RM4.07) in annual investment to fund power, transport, telecommunications, water and sanitation projects through to 2025. -- BERNAMA