MAMSB CEO: Good time to pick stocks
Equities said to be trading at low valuations
JASON Chong Soon Min of Manulife Asset Management Services Bhd (MAMSB) is no stranger to the financial services and investment industry.
While he has been chief executive officer of MAMSB for almost two years. the market is familiar with Chong’s solid style of investing and analysis. He has always been known as one of the better analysts and fund managers. Chong has been in the industry for some three decades now.
Chong joined the company in 2010 and was appointed a director in 2012. In his time with Manulife, he has led the asset management organisation including the equity, fixed income and multi-asset as well as other business functions such as operations, compliance and product development investment teams.
Prior to joining Manulife, Chong was the chief investment officer (CIO) of a local-foreign bankbacked joint venture AMCO, where he managed about RM5bil worth of domestic and regional equity and fixed income funds.
During this period, funds under his management outperformed for three consecutive years, winning numerous awards.
Before joining the fund management industry, Chong spent 14 years as an investment analyst in Malaysia covering local and foreign equities.
Chong holds a Bachelor degree in economics and finance from the University of Southern New Hampshire, United States. He also holds a capital markets and services representative licence in fund management.
Meanwhile, MAMSB is a wholly-owned subsidiary of Manulife Holdings Bhd, listed on Bursa Malaysia which is majority owned by Canada-based Manulife Financial Corp.
Other subsidiaries under Manulife are Manulife Insurance Bhd and Manulife Insurance Labuan Ltd.
MAMSB offers a comprehensive range of 48 unit trust and PRS funds in the asset classes of equity, fixed income and money market.
Having been in the financial services and investment industry for over three decades, what do you think is your greatest strength or niche?
Having been in the investment industry for the last three decades, I don’t think I can synthesise my strength to one particular attribute. I would rather share with you the experience I have learnt at different stages of my career. I started as an equity analyst, then a fund manager, CIO and now CEO.
This career progression has taught me to first appreciate the need to understand the fundamentals, identifying values, being decisive and having conviction in your calls.
While these traits helped me to become a more effective fund manager, being CIO and CEO taught me the importance to put customers first, being truthful and working together as a team to deliver the best outcome for our customers, shareholders and colleagues.
We are coming from a poor 2018. Most people have lost money. How would you be positioning yourself or your fund?
It won’t be fair and accurate for me to come up with a conclusive response on how we’re positioning our funds given the variety of our offerings in terms of asset classes and markets invested. To help you better understand, I’d want to spend a little time providing an overview of MAMSB and its evolution over the past couple of years.
As the Malaysian arm of Manulife’s wealth and asset management division, MAMSB brings together the best of two strengths – fund distribution and investment expertise. MAMSB has always been known as more than a typical asset management company where investment expertise is of paramount focus, we also boast of a distribution network of over 2,300 advisers in Malaysia.
In line with Manulife’s integration of wealth distribution business and the asset management operation in Asia that was set in motion about three years ago, MAMSB has expanded significantly in the bank partnership distribution channel, the sales of which is fast catching up with that of our captive advisor network.
Combining the two channels, the compounded annual growth rate of our unit trust asset under management over the past five years reached 59%. We have also enhanced our adviser channel, almost doubling it over the past five years.
But numbers don’t tell the full story. By combining our expertise and experience in both investment and distribution, we customise multi-faceted, outcome-oriented solutions that address each and every of our client’s needs. Today, we offer 47 onshore and offshore mutual fund products in Malaysia for our customers to choose from.
Do you see this as an opportunity for a better 2019? What is your outlook?
In terms of 2019 outlook, we should remember that 2018 started on a wave of optimism over prospects for synchronised global growth. However, it turned out to be one of divergent trends and increased geopolitical and economic uncertainty, which weighed heavily on financial markets. For 2019, it’s a different story in the sense that we are coming into the year with a low base.
In 2019, we expect a moderate and more balanced global growth, which will reduce worries over inflation and interest rates, and put less pressure on bond markets. We think central banks will not deliberately trigger recessions as long as inflation remains well behaved. Meanwhile, the US dollar is peaking and could begin its descent in the course of the year, which could provide an important tailwind for emerging markets.
The gradual progress in trade negotiations between China and the United States is a hopeful sign. We could see economic growth in major regions re-converge at moderately lower levels that would make the continuation of that growth more sustainable. Moderate, better balanced global growth will reduce concerns on inflation and interest rates, which will put less pressure on bond markets and allow equity markets to recover from last year’s selldown.
Globally we had trade war worries and fears of an impending recession in the United States. Does this worry you or do you feel it is more or less priced in?
“Going along very well” was the headline of the week by President Donald Trump on US-China negotiation. This may signal a reduction in trade friction between the world’s two largest economies. A long-term solution will still depend on some fundamental reforms from China in areas that, aside from trade and tariffs, include industrial policy, security threats and external influence.
The Trump administration, Congress and US business are all united on the key issues that China needs to address and the US negotiating team will insist on meaning- ful targets, dates, and verification for what is agreed in the next three months.
China is prepared to put quite a lot on the table immediately and with mounting pressures from a slowing economy, is anxious to bring the trade war to a close. A trade deal would be an obvious catalyst for a rally in global equities in the first quarter of 2019.
The potential support is greatest for China equities, whose valuations could recover significantly if domestic investor sentiment improves. Chinese stocks have fallen around 20% in 2018, to a large extent due to valuation compression from the twin headwinds of financial deleveraging and the trade friction.
On the US economy, our view is clear that US is entering a late cycle, but there is no immediate threat of recession. The current majority consensus is that we are in the mature (or late) stage of this business cycle. A record 85% of fund managers say the global economy is in the late cycle, 11% above the previous all-time high in December 2007. Yet most recession gauges are not even flashing amber.
Despite the current media preoccupation with recession, we think it is too early to worry about the end of this cycle. The term “late-cy-