KUALA LUMPUR: UOB Asset Management (Malaysia) Bhd advises investors to accumulate healthcare, technology sectors for their earnings momentum, and the utilities sector for their defensiveness and dividend yield.
Its CEO Lim Suet Ling said in the last few months, strong-performing stocks in the healthcare sector helped to moderate the drop in the FBM KLCI.
“Looking forward, an active stock selection strategy will be key in identifying quality stocks to make up a portfolio that can help local investors ride through the market volatility, ” she said in a statement on Wednesday.
In the first half of 2020, the Covid-19 pandemic has triggered a global recession and led to the FBM KLCI falling by 5.5%.
The impact of the pandemic also resulted in a significant divergence in the performance of Malaysian stocks. Stocks from financial and tourism-related sectors dipped, while those from the healthcare sectors rallied.
Lim said despite the KLCI’s current lacklustre performance, she remained positive on Malaysia’s long-term investment potentials.
She added while financial markets globally are still coping with the fallout from the impact of the pandemic, governments and central banks, including Malaysia, are rolling out unprecedented fiscal and monetary policies to support their economies.
For example, the PENJANA economic stimulus package will further lift the total value of the country’s support packages to RM295bil.
This is coupled with Bank Negara Malaysia’s recent move to reduce the overnight policy rate for banks to a record-low of 1.75%.
“Such initiatives demonstrate the government’s proactive efforts in keeping the impact of the Covid-19 pandemic under control, ” she said.
Lim said due to the current volatile market conditions, recommended an active stock selection strategy to build a portfolio that has higher probability of outperforming the equity benchmark index.
An active stock selection strategy identifies investment opportunities in individual stocks based on their fundamental strengths.
“The strategy is key to the fund house’s investment approach to aim for consistent long-term returns for the benefit of investors, and is even more critical during times of market volatility, such as these, ” she said.
To help investors understand current market developments and how UOBAM Malaysia generates returns through investment strategies such as active stock selection, the fund house launched “One Minute Insight”, a weekly online video programme.
It features UOBAM Malaysia’s investment experts who will share their insights into the latest market and investment trends with corporate and individual investors in a digital, bite-sized format.
The programme will provide an insight about global trends and also offer investors investment tips to help them make decisions to optimise their asset portfolios across local, regional and global markets.
It will be available in English, Bahasa Malaysia and Chinese. Visit www.uobam.com.my to view the pilot episode of the programme.
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