More bet on real estate than stocks

KUALA LUMPUR: Thirty-eight percent of Malaysian respondents of the Franklin Templeton Global Investor Sentiment Survey (GISS) expect real estate to be the best performer this year while 15% chose stocks.

This was consistent with respondents in China, India and Australia who all ranked stocks after real estate to be the best performer in 2014.

“There was a rise in confidence in stocks as an asset class compared with last year’s GISS survey. This shift could be due to the positive global economic outlook that is on a recovery path primarily driven by the United States.

“Many believe this recovery will eventually have a spillover effect to the exporting nations in Asia as well as Malaysia.” Franklin Templeton country head for Malaysia Sandeep Singh said in a report.

More than half of respondents believed that Asia would deliver the best equity and fixed income returns in 2014 and the next 10 years.

In terms of equity, 37% respondents expected Asia (excluding Malaysia) and 22% thought Malaysia would deliver the best equity return this year.

Meanwhile, 30% and 21% expected Asia and Malaysia, respectively, to deliver the best fixed income return this year.

“It is interesting to see this shift as it shows that Malaysians are open to the idea of investing further abroad. This is shown in the findings where 14% of them believe the United States market will generate the best equity return in 2014 beyond Asia and the home country,” Sandeep said.

The survey showed that in line with the Asian counterparts, 84% of Malaysians were optimistic about reaching their financial goals, topping the average rate of optimism by the Asia Pacific respondents of 80%.

On confidence of investment returns by asset class, Malaysian investors displayed a similar view to other Asian responders Asians in identifying stocks and real estate as their top investment choices. Based on the GISS survey, close to half or 45% of Malaysians owned a syariah fund. “To diversify their portfolio, 43% invested as it works with their religious beliefs, and 42% believe that syariah funds could potentially offer higher returns that its conventional peers,” Sandeep said.

This is supported by another finding in our survey that 45% of Malaysians plan to invest in funds based in foreign currency and 52% of them ranked the US dollar as their top foreign currency choice.