KUALA LUMPUR: The process of selling and bottoming out in global financial stocks will last for some time but a window of opportunity of about six to nine months has opened for investors, said DBS Asset Management Ltd senior portfolio manager and chief equities strategist Peter Chiang.
However, people who were interested in investing in this sector should not only look at equities, he said.
“They should also look at credit instruments, issued by these financial institutions,” he told reporters yesterday at the launch of HwangDBS Global Financials Capital Protected Fund (GFCP) and the HwangDBS Global Financial Institutions Fund (GFI).
Chiang felt that the kind of loans, and bonds financial institutions, especially those in the US, are issuing were very “rich” and attractive.
From left: Peter Chiang, HwangDBS investment Bank MD and head of investment banking group Lee Jim Leng, Teh Cheah May and Teng Chee Wai
“Some of these major US banks are issuing bonds with 8% yields per annum, which over 10 years will double your money, you will probably get capital appreciation as well,” he added.
The closed-ended capital protected GFCP is targeted at the risk-averse investor, while the GFI being an open-ended mixed security growth fund is aimed at more risk-tolerant investors.
The minimum initial investment for the GFCP is RM2, 000 and minimum additional investment is RM1,000. It has an approved fund size of 500 million units retailing at RM1 per unit during the offer period, which ends Aug 23.
The fund is available exclusively at all Malayan Banking Bhd (Maybank) outlets nationwide.
Meanwhile, the minimum initial investment for the GFI is RM1,000 and the minimum additional investment is RM100. It has an approved fund size of 400 million units retailing at 50 sen per unit during the initial offer period.
The fund's target net asset value strategy allows early maturity of the fund, should it hit 60%, 80% or 100% returns on its initial capital invested during the third, fourth and fifth year respectively.
HwangDBS Investment Management Bhd chief executive officer and executive director Teng Chee Wai agreed that it might not yet be the bottom of the cycle for global financial stocks.
“We are entering maybe not the end of the financial (sector) bottom, but it is time now to begin to slowly average into the market,” he said.
On HwangDBS' net asset value target for the year, Teng said considering the challenging economic conditions, the asset house had a conservative target of reaching RM7bil by year-end from RM6.9bil as at June 30.
Fund distributor, Maybank executive vice president and head of wealth management and consumer banking Teh Cheah May said that she expected demand to be skewed more towards the capital protected fund
Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.
