SINCE March 9, there has been an impressive rally in the equities market with Asian bourses predominantly outperforming global equities. Equities have rallied as much as 43% – as measured by the MSCI World as at June 4 – from the market trough in March, on the back of worsening economic data, as many countries hit their worst ever GDP contraction in decades. This raises the question of whether the rally is justified and can continue, and whether it is too late for investors to jump on the bandwagon.
CIMB Private Banking is of the view that it is still not too late for investors to participate in this rally, although the magnitude of the rally is rather sharp, spanning over a period of three months. We believe that the rally can be sustained due to the following reasons:
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