The potential peak in the rate cycles of central banks and the easing of the political risk premium on the local equity market could be the catalyst for a narrowing of year-to-date losses in the FBM KLCI in the second half of the year.
BURSA Malaysia-listed companies have realised how important it is to be cash rich when faced with an unexpected and severe situation like the Covid-19 pandemic.
This is especially given the tough economic conditions the business community has had to weather in the past year, with lockdowns enforced in Malaysia and its major trading partners to contain the spread of the virus, bringing activities practically to a standstill.
Many companies built up their cash positions in 2020 in anticipation of the severe economic downturn due to Covid-19, notes private investor and former investment banker Ian Yoong.
“Larger listed companies issued bonds and other fixed-income securities. It is a natural response to be conservative in the face of an impending severe economic downturn,” he says.
WITH the overnight policy rate (OPR) at a record low of 1.75% and with most economists pricing in another 25 basis point cut to 1.5% in the first quarter, savers with a higher tolerance for risk may opt for other alternatives for returns on their savings.
One option would be to invest in stocks that offer dividend yields of at least 4% or more, which is much higher than the prevailing fixed deposit rate of 1.75% to 2% offered by most banks.
“Dividend-yielding stocks are evergreen stocks as long as they keep paying. If you are buying [a stock] for dividend yields, then you should not expect too much from capital appreciation.
Unit trust fund managers have enjoyed strong inflows this year, even as the product sees unprecedented levels of competition from a host of new and emerging investment platforms. Nonetheless, unit trusts will continue to be the dominant form of investment for the foreseeable future, industry players tell
Wealth.
“I think no matter how much we try to simplify the product and maximise our education efforts, there is just a baseline amount of complexity built into the investment landscape. That complexity cannot be avoided. And, ultimately, most retail investors want to be guided through their decision-making. That service is presently best expressed in the unit trust industry via an agency force,” Areca Capital Sdn Bhd CEO Danny Wong says.