A better year for Bursa Malaysia and investors, HLB says

Published: Feb 03, 2024 by 
PropertyGiant Malaysia
Hong Leong Asset Management equity fund manager Yu Junqiang (middle) presenting his views on traditional investments as opposed to hedge funds while UBP Asset Management managing director Francis Wong (left) looks on.
Hong Leong Asset Management equity fund manager Yu Junqiang (middle) presenting his views on traditional investments as opposed to hedge funds while UBP Asset Management managing director Francis Wong (left) looks on.

KUALA LUMPUR: Hong Leong Bank Bhd (HLB) anticipates a positive outlook for Malaysia in 2024, forecasting an uplift in the local stock exchange driven by a combination of factors.

Its regional wealth management managing director Hor Kwok Wai attributed this optimistic forecast to the synergy of increased foreign direct investment (FDI), a rising tide in tourism, and heightened infrastructure spending.

“We are beginning to see a bit of life in the Malaysian market. A lot of people nowadays trade in offshore markets, especially the younger generation. But I think what we are trying to say is, in 2024, don’t forget Malaysia,” Hor shared during his presentation on the bank’s house view on 2024 economic outlook at HLB’s inaugural wealth management conference titled ‘Wealth Symposium: Fresh Takes 2024’.

Hor believes that Malaysia's decision to allow visa-free entry for citizens from the two most populous countries, China and India, will drive tourism.

Furthermore, he attributed the expected increase in FDI to the political stability of the current government.

Hor expressed confidence in the government's stability and anticipates their governance for a more extended period, favouring long-term strategies over short-term measures.

Meanwhile, when asked which sector to look out for in 2024, Hong Leong Asset Management equity fund manager Yu Junqiang named the utilities sector and the consumers sector.

“The utilities sector is expected to gain due to the government’s aggressive push towards renewable energy, while for the consumer sector, the deflationary pressure should be able to drive them,” he said during a panel discussion on the evolving landscape of investment strategies.

Amid global economic challenges, the bank expects Malaysia’s economy to grow better at 4.5% this year.

Hor said the local economy’s growth will mainly be driven by domestic demand and the tech upcycle.

In terms of the local’s overnight policy rates (OPR), Hor believes it will remain flat at 3% this year.

“There is no need for Malaysia to adjust its interest rates. Due to the anticipated interest rates cut in the United States (US), the interest differentials between US and a lot of other countries are going to narrow,” he said

Hor foresees regional currencies improving, adding that, “...we are bearish on the dollar, and generally bullish on Asian type currencies.”

Hor also ruled out a recession in the US, citing an anticipated soft landing, but emphasised the importance of monitoring the US Federal Reserve's (Fed) rate-cutting strategy.

He noted that, following a conservative approach, the bank expects the Fed to cut interest rates three times this year, projecting a year-end rate between 4.5% and 4.75%, compared to the current 5.25% and 5.5%, reflecting a cumulative cut of 75 basis points.

Consequently, he believes Asian countries will see their currencies improve owing to the narrowing interest rate differentials.

“Basically, the house view is that we are bearish on the dollar, and generally bullish on Asian type currencies,” he added.

The bank anticipates the ringgit to strengthen against the US dollar, reaching RM4.56 by year-end. At the time of writing, the ringgit is trading at RM4.73 against the greenback.

With better growth in Asia and a more favourable currency outlook, he believes that the Asian market will eventually gain greater confidence among international investors, leading to increased FDI.

Commenting on inflation, Hor said that it peaked worldwide in 2022. He believes it will taper off but not return to pre-pandemic levels, instead remaining slightly higher.

On China, Hor said that it is showing signs of stabilisation.

“Although China’s growth is still expected to be a bit lower. But, as you know, sometime in 2024, the smart money doesn’t wait for the data to turn. Rather, the smart money usually buys ahead of data,” he noted.

He pointed out that, in terms of China, he believes the worst news is already behind.

“It will be quite surprising if a new factor comes out to impact the Chinese market and I think the interesting part is that valuations within the market are very undemanding currently,” he added.

Hor also emphasised the significance of adopting a long-term perspective in wealth management, staying updated on the latest trends, and remaining informed through trusted relationship managers who serve as valuable resources.

"We believe that comprehensive wealth management is not merely a financial roadmap; it represents a commitment to realising your aspirations and securing a legacy for future generations.

“We understand that wealth management entails being a partner in our customers’ wealth journey, crafting a meaningful financial narrative that aligns with their unique goals. Organising symposiums like this is one of our approaches to acting as a guide, empowering and guiding both customers and investors to stay informed with the latest insights and trends, enabling them to navigate the complexities of the financial landscape,” he added.

In addition to symposiums, Hor said the bank embraces a ‘Built Around You’ customer-centric approach, developing personalised financial solutions tailored to different risk appetites and needs.

“Our team of professional financial advisors, including our relationship managers, is dedicated to ensuring that customers have a comfortable and informed investment experience, leading to enduring prosperity."

Customers can embark on their investment journeys with ease, starting with as little as RM50 through self-managed investments via HLB Connect Online. Additionally, they can seek assistance from the bank’s professional wealth managers to plan for their children’s education, retirement, and legacy needs.

The bank has a wide range of solutions that can help customers explore untapped potential and achieve sustainable growth by creating a dynamic investment portfolio across Malaysia, Singapore, and other regions.

Credit : THE STAR

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