New Straits Times - - Business -

THE Re­tire­ment Fund Inc (KWAP), Malaysia’s sec­ond-largest pen­sion fund, may in­vest in the lo­cal units of overseas in­sur­ers as they sell stakes to com­ply with the coun­try’s for­eign own­er­ship lim­its.

KUALA LUMPUR: Malaysia’s econ­omy is re­silient enough to with­stand any fi­nan­cial im­pact once the China bub­ble burst, said RHB As­set Man­age­ment (RHB AM).

Its chief in­vest­ment of­fi­cer of eq­ui­ties Mohd Fauzi Mohd Tahir said the stock mar­ket would be the first to be hit, with the reper­cus­sions felt in the bank­ing sec­tor, and to be fol­lowed by con­sump­tion spend­ing.

“Malaysia along­side most Asean coun­tries have been strength­en­ing their bank­ing sec­tor by both debt re­struc­tur­ing and build­ing re­serves. In fact, our re­serves are in good stand­ing. There should not be much to be con­cerned of as there are al­ready mea­sures taken by the reg­u­la­tors,” he said.

Fauzi added that Malaysia’s first quar­ter gross do­mes­tic prod­uct growth was 5.6 per cent, thereby sur­pass­ing ex­pec­ta­tions. He said the trend was sus­tain­able, with the FBM KLCI ex­pected to hit 1,800 points by year-end.

“We are very much pos­i­tive of the mar­ket for this year,” said Fauzi at the RHB Mar­ket In­sights Fo­rum 2017, here, yes­ter­day.

“For the last three years, from 2014 to 2016, we have close to RM30 bil­lion funds out­flow. In the first half of this year alone, we saw a RM10 bil­lion in­flow and this is a pos­i­tive devel­op­ment, and as long as the mar­ket is still de­liv­er­ing re­sults.”

How­ever, he re­mained con­cerned on the Euro­pean Cen­tral Bank’s bond-buy­ing pro­gramme and United States Fed­eral Re­serve’s in­ter­est rate rises.

“First-quar­ter earn­ings are good with cor­po­rate earn­ings in ex­cess of eight per cent, above in­vestors’ ex­pec­ta­tions of six per cent. That has been the con­ver­gence of pos­i­tive news that has pushed the eq­ui­ties mar­ket in the first half of this year.

“The first half has been in ex­cess of 10 per cent, but the re­gion as whole, we are not the best­per­form­ing mar­ket. We are in the bot­tom half in terms of per­for­mance.

“If you look at the per­for­mance of Bursa Malaysia, we have done quite well in iso­la­tion, but rel­a­tive to the re­gion we have not. The mar­ket touched 1,800 late last year, but now is now con­sol­i­dat­ing. We still see strong cor­po­rate earn­ings and po­ten­tial up­sides to the eq­uity mar­ket for the sec­ond half,” said Fauzi.

RHB AM man­ages some RM54 bil­lion of as­set un­der man­age­ment from its of­fices in Sin­ga­pore, Hong Kong, In­done­sia as well as Kuala Lumpur. Lid­i­ana Rosli

For the first half alone this year, we saw RM10 bil­lion funds in­flow and this is a pos­i­tive devel­op­ment as long as the mar­ket is still de­liv­er­ing re­sults.”

MOHD FAUZI MOHD TAHIR RHB AM chief in­vest­ment of­fi­cer of eq­ui­ties

KWAP chief ex­ec­u­tive of­fi­cer Datuk Wan Ka­maruza­man Wan Ah­mad says the fund is call­ing for pitches fol­low­ing in­quiries

about buy­ing stakes in overseas in­sur­ers’ Malaysian units.

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