KUALA LUMPUR – Affin Hwang Asset Management Berhad (“Affin Hwang AM” or “the Company”) believes that synchronised growth across emerging and developed markets will be positive for risk assets, as a positive earnings revision cycle continue to underpin markets. Asia remains one of the top-performers, with the MSCI Asia ex-Japan Index advancing 41.8% (USD terms), compared to the MSCI AC World Index which gained 21.6% YTD (Source: Bloomberg, as at 31 Dec’17).
In a media press briefing today, Teng Chee Wai, Managing Director of Affin Hwang AM said, “We expect the year 2018 to be a front-loaded market, with a risk-on script continuing into the 1H’18 and investors riding on the momentum to extract as much returns as possible in this period. Positive sentiment in markets and the recovery in crude oil prices will help fuel the momentum and cheer on the rally. Markets remain in a sweet-spot position with positive growth, and benign inflation which has kept policy tightening at bay and created the right conditions for risk-assets to perform well.”
“Volatility could pick-up in the 2H’18, as markets adjust to a reversal of a rate-cut cycle, with global central banks expected to gradually lift interest rates and embark on their balance-sheet unwinding. The gradual withdrawal of monetary stimulus would be a key focal point in markets, where there would be a need to now adapt to an environment of rising rates and lower liquidity in the system,” continued Teng.
On outlook for Asia, Teng adds, “We remain positive on Asia as a weaker US dollar environment and higher commodity prices across the board provide the uplift for Asian equities. The earnings revision cycle out of Asia continue to point towards strength, with earnings having been revised upwards by 5% on a 3-month rolling period. Valuations remain attractive from a forward P/E valuation standpoint, whereby Asia ex Japan still trades at a 18.7% discount compared to developed markets. In an era of low or negative yield rates, bond yields in Asia stands as an outlier providing positive yields for bond investors.”
In a company update briefing, Affin Hwang AM is also on track to meet its RM50 billion assets under administration (“AUA”) target by 2018. Charting one of the strongest growth trajectory in the company’s history, the company’s AUA grew by over RM 11 billion last year to reach RM47.3 billion as at Dec’17.
“This is an achievement that is both humbling and exciting for us, but never taken for granted. As an asset management player that puts integrity at the forefront of our core values, we will continue to manage our clients’ wealth responsibly through their hard-earned trust. We aim to sustain our growth momentum by building on our existing capabilities and knowledge-base to harness operational efficiencies within the company,” Teng says.
On business plans for 2018 Teng adds, “To stay at the forefront of the industry, we will continue to expand our investment offerings including alternative asset-classes such as private equity, real estate and low-cost solutions such as ETFs to serve our clients’ needs in an increasingly dynamic market environment. This would enhance our suite of offerings through proven solutions that are able to cater across the entire wealth spectrum as a full-fledged asset management player.”
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