Wednesday, January 16, 2008

Malaysian trust funds gain 21% in 2007

TheEdge

KUALA LUMPUR: Trust fund net assets in Malaysia rose an average 1.42% in December 2007, raising the cumulative gains for the year to 21.33%, as soaring commodity prices bolstered the Kuala Lumpur Composite Index, according to the Lipper Malaysia Fund Market Insight Report.

“The past year was a good one for the Malaysian bourse, which hit historic highs. As a net exporter of petroleum and palm oil, Malaysia benefited from the current global commodity boom,” said Kenneth Koh, Lipper head of research for Asia (excluding Japan).

“The new year started on a rosy note for the Malaysia stock market, although the shorter-term picture has become increasingly volatile amid predictions of a major bubble in Chinese equities and a faltering US economy, while asset inflation is being felt in the country and the region,” he added.

In December, commodity funds led the group of eight asset classes tracked by Lipper, with a monthly 2.94% gain, followed by equity schemes, which added 2.12%. Mixed-asset funds came in third with a 1.78% advance.

Money market and bond funds rose 0.17% and 0.11% respectively, during the month.
The eight asset categories comprise 485 funds, of which 47% or 229 funds are equity-based.

Lipper does not track exchange-traded funds, and real estate investment trusts.

“The Malaysian currency rose nearly 6.7% against the US dollar for the year, amid strong buying of local shares and optimism about the Malaysian economy,” Koh said.

Over the 12-month period last year, equity schemes were the best performers, having chalked up 30.67% growth, followed by target maturity and mixed asset funds, which rose 27.66% and 22.53% respectively.

At the bottom of the list are bond and money-market funds, which posted advances of 3.2% and 2.82%, respectively.

In terms of sectors, in December 2007, general industry equity schemes took the lead, having grown an average 5.65%.

Information technology equity and small and middle-size equity funds grew 5.09% and 3.92% to clinch second and third spots.

Property funds, however, fared poorly during the month and the year, with schemes parking their money in global real estate, dipping the most at 6.47% and 14.91% respectively, due to the US subprime loan crisis.

For the full year, natural resource equity funds took the top spot, having gained an average 60.2%, trailed by the general and basic industry equity schemes, which rose 48.23% and 44.37% respectively.

Meanwhile, Islamic unit trusts rose 1.95% in December 2007 to end the year with a 22.84% gain, outperforming the broader market’s 1.42% and 21.33% advance respectively.

CMS Islamic Fund which invests in Malaysian equities was the best performer in 2007 with a 78.97% return, followed by OSK-UOB Emerging Opportunity Fund, a small and middle-sized capital equity scheme, with a 76.47% gain.

Trailing at the bottom of the list is the Malaysian equity-based Philip Master First Ethical Fund, which lost 18.5%

The KLCI, comprising 100 blue-chip stocks, gained 32% in 2007, making it the world’s third-best performer, after the Shanghai Composite Index and Bombay Stock Exchange Sensitive Index (Sensex), which rose 96.66% and 47.15% respectively.

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