KUALA LUMPUR: Standard Chartered (StanChart) has maintained Malaysia’s gross domestic product (GDP) growth for 2024 at 4.8%, in line with Bank Negara Malaysia’s projection of 4% to 5%.
Head of managed investments and advisory in Malaysia Ng Shin Seong said this projection, however, has not taken into consideration the future measures on subsidy rationalisation.
“On the fuel subsidy (diesel), we think it is a very targeted approach, ensuring that the people who need assistance will receive support.
The diesel subsidy rationalisation will help the government’s fiscal position and we think it is an upside for the country, he told reporters at its Global Market Outlook Second Half (H2) 2024: Adapting to Shifting Winds media conference.
As for the ringgit, Ng said StanChart is forecasting the ringgit to strengthen to RM4.66-level against the US dollar by year-end, backed by the expectation of one to two interest rate cuts in the US.
We also expect the ringgit to marginally appreciate next year, as we believe the US Federal Reserve (Fed) will continue with its interest rate cuts, Ng said.
In addition, he stated that investors are advised to take note of the shifting winds in Malaysia, as the investment outlook in the country has improved with the FTSE Bursa Malaysia KLCI (FBM KLCI) notching a 12.7% rise year-to-date.
“Malaysia attracted record approved investments in 2023 and is emerging as a data centre powerhouse in Southeast Asia.
Structural reform which includes targeted subsidy rationalisation and the adoption of sustainable growth under major plans such as the New Industrial Master Plan 2030, National Energy Transition Roadmap, and the National Semiconductor Strategy will likely draw quality investments, he said.
Last year, StanChart launched its Signature CIO Funds consisting of four globally diversified multi-asset funds designed to provide retail investors with access to the bank’s CIO views.
Since then, the series of foundation portfolios catering to different risks and income profiles have raised close to RM1 billion.
On the global front, StanChart head of asset allocation Audrey Goh said the start of major central bank interest rate cuts marked a key turning point for investors as policymakers switched their focus towards supporting growth.
She said the bank sees this as a good time to adapt to the shifting winds by staying overweight on equities over bonds and cash.
Goh said the bank favours the US equities globally and India equities in Asia, as well as owning gold and emerging markets (EM) US dollar bonds for diversification.
We continue to favour growth sectors in the US, focusing on the technology and communication service sectors, she said.
In Europe, she said the strategy is consistent with the improvement in the growth outlook and having overweight on the technology and healthcare sectors.
In China, we favour select government policy beneficiaries and are ‘overweight’ on the technology, communication services, and consumer discretionary sectors, Goh added. - Bernama
