KUALA LUMPUR – Affin Hwang Asset Management Berhad (“Affin Hwang AM” or “the Company”) believes that despite the prolonged uncertainties within global financial markets, investment opportunities still exist. The recent Brexit event, and the US Federal Reserve’s decision to keep its policy rates on hold has been beneficial to the Asian region as investors go on a hunt for returns. Within the region, we have seen ASEAN markets performing and signs of stabilisation in China. Nevertheless, with global growth slowing, asset managers will likely be kept on their toes as they navigate through the undercurrents of the markets.
David Ng, Chief Investment Officer of Affin Hwang AM said, “We have seen global financial markets reverse its trend post the Brexit sell-off, and with liquidity expected to remain flush, markets will likely be well supported for now. The next key event to look out for would be the US Presidential election, which introduces added uncertainties. We believe that all eyes will be kept on the event as the results could well shake global financial markets in a way that the Brexit event had.”
On navigating the Asian markets David said, “Global investors’ hunt for returns has resulted in stronger inflows into emerging markets in general, and specific countries in Asia. With the stabilising US Dollar and commodity prices, coupled with liquidity being pumped into the system, I do think that the region will continue to provide us with investment opportunities.” David also commented that concerns over the sustainability of China’s economic growth may be easing with the capital flows out of China slowing down on the back of diminishing expectations for a U.S. rate hike.
When looking for themes, Affin Hwang AM believes that the income theme will continue to do well against the current economic backdrop. With global developed market bond yields on a downward trend, dividend yields have started to look more attractive in Asia, giving a nudge to investors to allocate monies to this region. An increasing number of countries are also increasing infrastructure spending to boost growth and improve productivity, more evidently in Asia. The Company has been actively participating in opportunities in the ASEAN markets, Indonesia, Thailand, and Philippines in particular, as the respective governments pledge to increase its spending for the sector.
On Affin Hwang AM’s strategy, David explained that focus will remain, as always, on quality of the underlying investments. With the income theme strongly in play, the Company remains focused on ensuring investors’ capital is not compromised for short-term gains. The company will remain invested in the Asian region, with ASEAN markets in particular given the more encouraging fundamentals.
David continued, “Our strategy under the current market is to remain invested through bottom-up selection of stocks. However, we would remain cautious given the fragility of the global financial markets. As cycles are expected to remain shorter and sharper, diversification in investors’ portfolios is necessary to provide for a long-term sustainable portfolio.”
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