Malaysian market catching up with regional peers


  • Markets
  • Monday, 31 Jul 2017

 KUALA LUMPUR: The local stock market could have a few catalysts going for it in the second half of this year that may push it to catch up with the rest of the region

“We are still bullish on the stock market. The market has gone up by some 7% in the year to date in ringgit terms while in dollar terms it is up by about 12%.

“But when compared to the region, most of the markets in the region have gone up even faster, especially emerging markets, which have gone up by 23%,” CIMB Principal Asset Management Bhd chief investment officer Patrick Chang told StarBiz recently.

“We have been lagging (behind) in the last couple of months.

“What I’m hopeful of is a few catalysts such as second quarter numbers that hopefully will be better than the first quarter numbers. This will give some impetus for both foreign and local funds to put money back into the Malaysian market,” he said.

Chang also said that other catalysts included new contracts that could be announced under the One Belt One Road initiative such as the East Coast Rail Link.

“This will be a major catalyst as well for the construction sector,” he said.

He noted that one of the major sectors that it was overweight on is in the e-commerce and the logistics sector because retail e commerce sales as a percentage of total retail sales is only at 1% at present.

“This is low when compared to China which is at about 18% while some of the neighboring countries such as Singapore is at 2%.

“There are many effects from the rise in e commerce. Whether it will be the first or last mile or whether it will be in logistics companies, they will continue to do very well,” he said.

Chang is also “overweight” on the tourism industry due to the increased arrivals of tourists from China and this could be a major catalyst for some of the companies which are involved in this sector.

Moving forward, he said that the Malaysian market may eventually catch up with the gains seen in the rest of the region as money would eventually need to find a home.

“If the catalysts I mentioned materialise then it may happen.

“The MSCI emerging markets are up by more than 20% now while we are up by some 13%. In the month to date MSCI EM is up 5% while Malaysia is flat. People are just waiting for catalysts,” he said

He said that historically, Malaysia has never been a cheap market due to trapped liquidity in the country, which will always cause valuations to be higher.

The Malaysian market, represented by the benchmark FTSE Bursa Malaysia KL Composite Index, is presently trading at close to 16 times historical earnings.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3

Business , CIMB , stocks , shares , Bursa , economy , Malaysia ,

   

Next In Business News

UK firms seek staff after lockdown but foreign workers missing
Axa IT ops in Malaysia, HK, Thailand and Philippines impacted by ransomware cyber attack
Premature to be envisaging second European stimulus plan
European climate group says EU needs far tougher van CO2 targets
At Home Group's biggest shareholder to oppose deal to take retailer private
What’s brewing at Privasia?
WTK faces price pressure on its panel products
The Week Ahead - Earnings, GDP, China loan, US FOMC
Call for another round of stimulus
Bond traders swarm European economies where inflation is hot

Stories You'll Enjoy


Vouchers