KUALA LUMPUR: Corporate earnings delivery will not significantly influence the Malaysian capital market this year as catalysts are expected to come from the external front, according to Affin Hwang Asset Management Bhd (Affin Hwang AM).
Its managing director, Teng Chee Wai, said for 2019, the company expects a single-digit upside in the FBM KLCI at around 8% to 10%, partly buoyed by recovery in global growth as the economic cycle matures.
“2019 is a year that the markets are going to respond more towards macro policies rather than earnings. And I do not see price-earnings expansion to be one big factor this year for the market because there is a very little growth,” he told a press conference after presenting Affin Hwang AM market outlook and company briefing here today.
“With 5% in (consensus) earnings (estimates) growth, I don’t expect this year to be a double-digit year (for the FBM KLCI),” he said, noting downward revisions in earnings are likely if there is slowdown in global economic activities.
Asked whether 2019 is a good year to invest in stocks, Teng warned of risks and uncertainties in the market such as the ongoing trade dispute between the United States and China.
“There is no such thing as the best time to invest ... you must be mindful of the risks, and asset allocation is the way forward,” he added.
Nevertheless, Teng said given the positive development in the US-China trade talks, coupled with changes in policy by the Federal Reserve, he is fairly confident that the market will improve at some point in the second half of the year.
On Affin Hwang AM’s outlook, Teng said the fund manager is confident that it will surpass the RM50 billion mark in assets under administration (AUA) this year and reach the RM52 billion level.
He said the firm’s AUA grew 0.84% or RM400 million to RM47.8 billion as at end of 2018 from RM47.4 billion in late 2017.
Earlier at the press conference, Affin Hwang AM’s Islamic entity, Aiiman Asset Management Sdn Bhd, launched its maiden fund called Aiiman Asia Pacific (ex-Japan) Dividend Fund, which marks its foray into the retail market.
Aiiman managing director Akmal Hassan said the fund is suitable for retail investors who want regular income distribution and capital gains, and have a medium- to long-term investment horizon and moderate risk tolerance.
The fund will invest a minimum of 70% of the fund’s net asset value (NAV) in syariah-compliant equities and a maximum of 30% of its NAV in sukuk, syariah-compliant money market instruments and/or deposits.
The base currency of the fund is in ringgit with a minimum investment amount of RM1,000.
