TheStar
Many stay on sidelines while waiting for right time to invest
PETALING JAYA: The recent “mini” stock market rallies on rising crude palm oil (CPO) prices ushered in some much needed cheer in the new year, but fund managers have generally remained cautious.
Kurnia Insurans Malaysia Bhd chief investment officer Pankaj Kumar said it was likely that most fund managers and investment heads would channel their funds into several asset classes to reduce risk.
“They might be placing more of the funds in corporate bonds which are a safer bet, compared with investing in the stock market under the current global economic climate,” he told StarBiz yesterday.
A fund manager with a local bank said fund managers were waiting for more positive and consistent signals before investing in the stock market in a bigger way.
“The worst is likely not over and there is too much volatility in the market to make an assessment,” the fund manager said.
Areca Capital Sdn Bhd chief executive officer Danny Wong said most fund managers would likely wait until the release of fourth quarter financial results before deciding to invest.
“They want to see if the corporate results meet their expectations and also whether the general global economic conditions are conducive to invest more in the market,” he said.
Many fund managers were choosing to stay on the sidelines and waiting for the opportune time to invest, Wong added.
“When the investment climate is right, they will then not lose out on the opportunity to enter the stock market in a big way,” he said.
Meanwhile, Pankaj said the global economic downturn also presented opportunities for cash-rich institutions to buy into battered stocks that had strong fundamentals and a potential upswing in their share prices in the medium to longer term.
“Despite the downturn every economic crisis presents opportunities for those able to capitalise on the situation,” he said, adding that state agencies such as Employees Provident Fund (EPF) and Khazanah Nasional Bhd should consider investing in undervalued stocks, locally or abroad.
Pankaj said some of the stocks, especially those in the United States were worth looking at as their share prices had fallen significantly.
He said while the current downturn could not be compared with the Great Depression of the 1920s and 30s, the global economic crisis would undeniably impact stock markets around the world, including Bursa Malaysia.
“Malaysia’s economy and stock market are intrinsically link to the US economy,” Pankaj noted.
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