KUALA LUMPUR: The positive inflow of funds into the market since April will continue to keep stock prices buoyant in the second quarter, despite flattish corporate earnings growth, according to Hwang Investment Management Bhd (HwangIM) CEO Teng Chee Wai (pic).
“Funds in general are coming back to Asean. Foreign participation has increased tremendously. As an industry player, HwangIM welcomes competition and players are forced to offer a variety of products,” he told a media briefing yesterday.
The Bursa Malaysia KL Composite Index was marginally up 0.4% for the year when it closed at 1,874 points yesterday. It reached an all-time high of 1,887 points on May 19.
He noted that Malaysian equity prices were “not cheap” compared with other markets around the region, but he considered the local market as “unique” due to the strong support from local institutional players.
Markets around the region had a torrid first quarter, as foreign investors fled on economic worries. However, April saw a sharp turnaround in most markets which helped them, including Bursa Malaysia, to erase their earlier losses.
“Investors are focusing on the fundamentals of Asean. They have come to realise that it is not bad, after all, and there are still some good stories to be told of the region,” said Teng.
One area that he continued to be bullish on was the oil and gas sector, driven by the steady number of contracts that had already been given out.
He projected that it would be a challenging year for the banking sector as measures introduced by Bank Negara to reign in rising household debts kicked in.
On the economy, Teng said Malaysia was on track to meet official economic expansion target after first-quarter growth accelerated to 6.2%.
However, he cautioned that the widely expected 25-basis-point interest rate hike likely to happen later this year might dampen growth in the coming quarters.
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