Wealthy Malaysian investors shift money to safe-haven assets

PETALING JAYA: Wealthy Malaysian investors are shifting their money to safe-haven assets such as bonds and gold from property in light of a more cautious market and the upcoming general election.

Knight Frank Malaysia managing director Sarkunan Subramaniam said wealthy investors in Malaysia notably increased their exposure to bonds and gold last year, as they were seen as safe-asset classes in light of 2018 being an election year.

“Post-election, we expect investors to accept more risks as the political landscape brings a new policy and economic cycle.

“Investors may also increasingly look at various real-estate opportunities across residential and commercial properties both at home and overseas,” he said in a statement in conjunction with the launch of Knight Frank’s The Wealth Report Attitudes Survey 2018.

In terms of investment trends in 2017, Knight Frank observed that the biggest draw for new investments by the wealthy last year were in equities.

“As stock markets around the globe soared, the appetite for shares was greatest in Asia. Beating the global average by 21%, 83% of Asian respondents said their clients increased their exposure to equities in 2017.”

The report added that gold seemed to have lost some of its glitter as an investment for most of Asia.

“Only China and Malaysia saw significant reallocation into the precious metal with 46% and 33% of respondents saying their clients increased allocations last year, above the global average of 25%.”

Meanwhile, Knight Frank Malaysia capital markets director James Buckley shared Sarkunan’s sentiment on the local property market being impacted by the impending election.

“Where there’s an election in any country, people will adopt a wait-and-see approach. We do see investments picking up after the election,” he said.

In its latest wealth report, Knight Frank said 43% of its Malaysian clients planned to invest in properties overseas, going forward.

At 43%, Malaysia topped the survey in terms of those looking to invest abroad, followed by Hong Kong (40%), China (37%) and Singapore (30%).

Knight Frank Asia-Pacific research head Nicholas Holt said the level of investors in Malaysia investing abroad had been relatively stable over the years. He said a similar trend could be expected over the next few years.

“It should be stable, going forward. With the current property glut and wait-and-see approach adopted by investors, it is certainly a driver to continue investing abroad.”

Only three countries – Malaysia, Hong Kong and China – were above the global average of 34% when considering overseas purchases, according to Knight Frank’s report.

It said the top-five overseas destinations for Malaysian investors in 2018 are Australia, Singapore, Britain, the United States and New Zealand.

The current Knight Frank’s wealth report, an annual snapshot of the issues influencing wealthy individuals’ investment and lifestyle decisions, was based on the response of 541 of the world’s leading private bankers and wealth advisers, representing roughly 50,000 clients with a combined wealth of around US$3 trillion (RM12 trillion).

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