eileen.hee@thestar.com.my
Robert Rountree
KUALA LUMPUR: Malaysia is back on the investment “radar”' and foreign fund managers can no longer afford to ignore its low valuations compared with other world markets and good growth potential, according to Prudential Asset Management head of investment marketing Robert Rountree. “Malaysia has re-entered the game,” he said.
Rountree told a briefing yesterday that Malaysia now stacked up better against giants such as China, India and the emerging Europe and Latin America.
He said while these emerging markets were considered cheap in that investors naturally went for the “low hanging fruit,” their low valuations had increasingly been eroded globally as these markets had soared.
“A major valuation field has been leapt and the playing field is now more level,” he said, adding that Malaysian companies' profit forecasts were “solid and are nudging higher.''
“There is also ample liquidity generated domestically and the ringgit continues to be competitive. On a risk/return basis, Malaysia's dividend yields are attractive in comparison to its regional counterparts.''
Rountree said his long-term outlook for Malaysia was positive given that a possible early general election would ensure a buoyant economy, citing the upcoming rollout of projects under the Ninth Malaysia Plan, an expansionary fiscal budget, expectation of more tax cuts in the next budget and a more open policy towards foreign investors as other potential catalysts.
He also said the ongoing restructuring of government-linked companies' appeared to be on track and gaining momentum, which helped in lifting sentiment.
On which sectors to invest in, Prudential Fund Management Bhd chief investment officer Lynn Cheah was bullish on property, oil and gas and plantation.
On whether the US market is headed towards a recession, Rountree said he believed it was on track for a “soft landing” because “American factories are investing in plant and machinery and operating at full capacity. There is also a back-log of unfilled durable goods orders.''
He said that even as the construction of residential property slowed, there was an increase in the construction of non-residential property.
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