Eq­ui­ties will con­tinue to do well on am­ple liq­uid­ity: Pa­cific Mu­tual

The Sun (Malaysia) - - SUNBIZ -

PETALING JAYA: Pa­cific Mu­tual Fund Bhd fore­sees the eq­uity mar­ket con­tin­u­ing to be well sup­ported on the back of am­ple liq­uid­ity aris­ing from low in­ter­est en­vi­ron­ment and quan­ti­ta­tive eas­ing in cer­tain coun­tries.

“In­vestors should long eq­ui­ties now. Cen­tral banks glob­ally and re­gion­ally re­main on an eas­ing mode and even the Fed which in­tends to raise in­ter­est rates is do­ing it very cau­tiously,” said Pa­cific Mu­tual Fund CEO and ex­ec­u­tive di­rec­tor Teh Chi-cheun in a state­ment yes­ter­day.

While val­u­a­tions are not cheap in Malaysia, he said they are not ex­ces­sive ei­ther.

“His­tor­i­cally, Malaysia has traded at a much larger price-toearn­ings ra­tio pre­mium to its peers but now In­done­sia is nearly on par with it and Thai­land not far be­hind,” he ex­plained.

Pa­cific Mu­tual, an in­vest­ment man­age­ment com­pany un­der the OCBC Group, favours the con­struc­tion, prop­erty and plan­ta­tions sec­tors for the Malaysian mar­ket.

Teh is of the view that there will be con­tin­ued in­ter­est in div­i­dend stocks and that more money will be in­vested in such stocks. How­ever, he be­lieves that in­vestors will put money in other stocks in­clud­ing growth and cycli­cal stocks given that the gap in val­u­a­tions can­not be too large.

Mean­while, he pointed out that the key risk for the eq­uity mar­ket is the out­come of the US pres­i­den­tial elec­tions.

“If Trump is elected, we could see trade bar­ri­ers and trade wars be­gin. As an open econ­omy which has sig­nif­i­cant ex­ports, Malaysia will be neg­a­tively im­pacted,” he stressed.

Pa­cific Mu­tual also an­nounced third-quar­ter in­come dis­tri­bu­tions amount­ing to RM11.13 mil­lion for five of its funds.

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