April 2, 2004

M’sia: Fastest growing Asian equity mart

By Reese Loh

Malaysia is the fastest growing equity market in the region, based on its bullish economic outlook and the inflow of foreign funds, says international ratings agency Standard and Poor’s.
S&P anticipated Malaysian equities to grow by more than 10% this year, propelled by positive investor sentiment, said William Reidy, S&P’s managing director of Asian equities investment services Asia Pacific.
“Malaysia will benefit proportionately from the inflow of funds into Asia,” he told reporters in Kuala Lumpur yesterday.
He said Hong Kong and South Korea would also outperform most other markets in the region.
Reidy said the agency was looking aggressively at some Malaysian stocks, particularly in the automotive and consumer sectors, as well as leisure counters such as Genting Bhd and Resorts World Bhd.
He said the Asian market this year would see a switch to equity funds although guaranteed funds would continue to perform well. He added that the ringgit peg was a plus point for investors, as it provided stability in terms of pricing.
He said Malaysia would remain “a value play” due to its anticipated higher gross domestic product and political stability. However, he said its prospects may be somewhat overshadowed by the heavier focus on China among investors.
Reidy also said the high prices of commodities should not be a cause for worry for the country, as excess production would likely be matched by additional demand from China.
He said S&P would set up an office in Malaysia by year-end, as its equity market was maturing and becoming more sophisticated.

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