TheStar
PETALING JAYA: Pending further announcements, fund managers are not expected to review their investment strategies following the Government's RM2bil cost-cutting package.
Apex Investment Services chief executive officer Tan Keah Huat said the package would not really have an impact on the company's investment stance as it was seen as one of the ways to improve government spending.
“We will continue to invest in equities of companies with strong fundamentals to ensure we provide good and stable returns to investors. The prospects of blue chip stocks remain bright and will continue to attract foreign investors,'' he told StarBiz.
Tan said although the cost-cutting package was a good move by the Government, nonetheless more concrete measures had to be adopted to ensure the public would not be burdened by the fuel price hike.
A spokesman from a fund management house said he expected fund managers to continue with their existing strategies which many of them had employed in view of the current rising crude and commodity prices.
“Many of them, pending further announcements, are embarking on defensive portfolios that will ensure investors will not lose out in their investments,'' he added.
On the company's investment strategy in view of the inflationary pressures, CIMB-Principal Asset Management chief investment officer Raymond Tang said: “For equity portfolios, we aim to invest in companies which exhibit earnings per share growth much higher than that of inflation.
“The end result is a more defensive portfolio. To minimise volatility in our fixed-income portfolios, we aim for shorter portfolio durations than the portfolio's respective benchmark.”
He said the company would not look at sectors per se, but at the earnings growth of individual companies.
Meanwhile, economists contacted said that apart from easing the people's burden, the Government's cost-cutting package might also help control fiscal deficit at current levels.
Malaysian Rating Corp Bhd chief economist Nor Zahidi Alias said the Government's fiscal deficit was expected to be RM20bil for 2008.
“The cost-cutting measures could translate to savings of the budget deficit,” he said.
Nor Zahidi said the measures could also be seen as a precautionary measure to help brace the Malaysian economy amidst the current global slowdown.
“I'm sure the Government wants to be ready to pump prime the economy should the global outlook turn out worse than expected,” he said.
RAM Holdings Bhd chief economist Dr Yeah Kim Leng commended the Government for its prudent management expenses.
“The Government is trying to enhance spending efficiency and this works hand-in-hand with the announced reduction in fuel subsidies,” he said, adding that it was necessary for the Government to identify growth areas to help boost domestic consumption to offset the demand slowdown from abroad.
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