Now that the event risk in Malaysia is behind us, it is
time for our market to focus on the fundamentals
driving it. With the ruling party maintaining its position as the government, we believe our local bourse will continue its ascension as investors can now start deploying their cash to the market, which has been sitting on the sidelines waiting
for the outcome of the election. We are expecting a surge in buying activities led
by foreign and local institutional investors who are attracted by our lagging market performance versus the regional peers and strong economic fundamentals such as good foreign direct investment, a positive investment cycle and strong consumer confidence.
In our case, we had been gradually deploying our excess cash to work since end February and have been buying the financial, oil and gas, and some property development stocks. This was to position the portfolio for what we expected to be a status quo election outcome.
Now, we are adding on equity weight in sectors that will do well postelection such as those involved in the continuation of nation building and economic development. These are the oil and gas, financial, construction and media sectors, in which the latter is a result of stronger consumer confidence and discretionary spending.
We are also expecting a strong Ringgit currency this year versus the greenback and other G3 currencies given the strength in our economic fundamentals, relatively high bond yields, foreign equity inflows coupled with the continued low global interest rate environment.On a broader perspective, our investment strategy for the Asian equity portfolio as well as the local equity funds is to buy and hold out for the global economic recovery to pan out and re-evaluate our strategy should the US Federal Reserve change its course, or if our view of a global recovery does not take place.
