A SHIFT in liquidity to the equity market from the bond market and possible inflows of foreign funds would likely lead to a better KLSE performance in 2004, said Pheim Unit Trusts Bhd (PUTB) chief executive officer Phua Lee Kerk.
“We believe that companies whose stocks are attractively priced and have very little gearing, command dominant market position and good earnings, and whose management is focused and knows the business, will perform well,” he said in a statement.
“With interest rates not likely to drop further and signs of liquidity shifting out of bond market into equities, the outlook for the stock market in 2004 would be positive,” he said.
In addition, foreign funds might have more reason to flow in as the concern that Malaysia was losing out to China had been dispelled by the high August–September export figures, he said.
“Relative to other markets, earnings growth and stock valuations for Malaysia still look attractive. Our stock valuations continue to be at a discount compared to some other markets in the region,” he said.
Economic fundamentals continue to strengthen with the US economy recovering further while Malaysia's economic growth had been resilient, Phua said. – Bernama