It's time to invest in Malaysia (Equity)

PETALING JAYA: Credit Suisse (CS) said it is now time for investors to put their funds into Malaysian stocks as current valuations indicate that local equities are poised for a strong recovery.

Malaysia has underperformed its peers in the emerging markets due to several reasons, among them being the downward pressure on the ringgit as well the selldown in heavyweight sectors such as banks.

But now, according to CS in an extensive report yesterday, while the 34% decline in Malaysian equities on a dollar-adjusted basis over the past 45 months was warranted, the market bottom may be close at hand.

Calling it as “the ultimate contrarian trade”, the research house outlined 10 reasons to be bullish (see table).

Among them is that Malaysia’s GDP growth may see further upside, thanks to a rebound in commodities. Additionally, the government may have more leeway to increase spending, given its conservative average crude oil price forecast of US$48 per barrel, CS said.

“We believe that the recent stability in the commodity complex we have witnessed the last of the downgrades to near term growth expectations.

“We now expect a pick-up in growth to 4.5% this year (above consensus expectations of 4.3%), driven by public infrastructure projects, commodity-related investments and a boost to rural income from the recovery in rubber prices,” it explained.

Another reason is on the improvement of earnings dynamics among Malaysian corporates. CS points out that at the sector level, the recovery in earnings revisions is led by the energy and mining space.

Additionally, among the larger sectors, consumer discretionary and staples have recovered sharply well into net positive territory with industrials and financials improving to at least neutral levels.

Another key catalyst for the markets is the attractiveness of the ringgit at present levels after significant devaluation.

Although Malaysia’s 15-year trend of a weaker ringgit in real effective exchange rate (REER) terms is justified by the steady erosion of its share of global exports, the 18% REER devaluation over the past three years appears severely overdone, given the relatively modest decline in export share over this period, CS noted.

One prominent beneficiary from the repair in the macro environment appears to be the banking sector, which is a heavyweight component for the FBM KLCI.

The research house said that private sector credit growth had just bounced off a 13-year low at 5.6% year-on-year in January compared to 4.2% in September last year.

“Encouragingly, deposit growth recovering back into positive territory should serve to moderate the pick-up in the loan-to-deposit ratio, which is currently at elevated levels which typically dampens credit extension,” it said.

To date, the FBM KLCI is already up by 6.3%. Yesterday saw the largest one-day turnover in stocks since May 2016 with total trading volume of 4.98 billion shares valued at RM5.04bil.

China masks lacklustre equity performance in Asia
Pengerusi CIMB Memulakan USD1Billion Ekuiti Swasta di Asia Tenggara
Masih Ramai Rakyat Malaysia Tidak Merancang Waktu Persaraan
Ramai Kurang Arif Dengan Pelaburan
Ekuiti Bukan Kasino Atau Skim Cepat Kaya
KWSP tingkat pelaburan dana Private Equity (PE) patuh syariah
Mencari Platform Alternatif Terbaik Untuk Melabur
From Debt To Equity Venture
Tips Untuk Membeli EKUITI
KANSER KUDIS KEWANGAN
Tips Elak Kerugian Pelaburan
EKUITI Sistematik Setiap Bulan Bantu Bina Tabungan Kukuh
Menilai Pembelian Ekuiti Dengan Betul
Mengambil Peluang di Dalam Pasaran Ekuiti
Foreigners bought RM192.4 million Malaysian equity last week, says MIDF Research
Asas Pengetahuan Untuk Mengelak Skim Cepat Kaya
Moody's: Asian integrated and upstream O&G companies should see profits rise
Peluang di Pasaran Pendapatan Tetap Ekuiti & Sukuk
Asian Equity Maybank sees Southeast Asia equity deals rising in 2017
It's time to invest in Malaysia (Equity)
Empowering your finances in 2017
Investing: Stay vigilant and be tactical this year
Asian Equity Fund to invest in 7 start-ups companies this year
Asian Equity : What Are Equity Funds Useful For In an Investment Portfolio?
Menguruskan Portfolio EQUITY
Sesi Penerangan EKUITI
Foreign funds offloaded RM481.7m last week, says MIDF Research
Lanskap Teknologi Kewangan (Fintech - Finance Technology) Mengubah Cara Pembiayaan & Pelaburan
Pemilikan saham bumiputera rendah
Pelaburan EKUITI Bantu Bina Kekayaan
Fund managers say good time to buy shares as ringgit weak
Money managers and asset owners allocating more to liquid investments
Sime Darby's plan to unlock asset value draws attention, shares raised to 'buy'
Ringgit susut nilai lagi kerana AS kenaikan kadar faedah matawang AS dan kekuatan dolar
Apa Itu Saham Ekuiti Syarikat
Unit Risiko Pelaburan Asian Equity
PNB mahu tingkatkan pelaburan dalam ekuiti swasta
Kelebihan Pelaburan Ekuiti
Residual Income & Career
Golongan Elit Mewah Di Selamatkan Oleh Keuntungan Ekuiti di Tahun 2015 Yang Mencabar
Kejayaan Pelancaran Ekuiti di Perak
Online Pocket
1st Batch Complete Profits
Kumpulan Wang Persaraan (KWAP) Turun Dividen 5%
Waspada Skim Cepat Kaya
Ramai Ketinggalan Di Dalam Pelaburan Hartanah