Monex News

Why Malaysian stock market optimism is rising

6 September 2018  |  News

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Why Malaysian stock market

Novice investors have lots of questions about how to  trade shares overseas. Modern devices and software let you buy and sell your shares on any internet connection, whether it’s a mobile phone, a tablet, or a laptop. All you need is live web access and less than $10 to get started (US trading begins at just $9.99).

If you choose to trade with Monex, it’s even easier. We don’t charge application fees or inactivity fees, and you can invest any amount, we don’t have a minimum balance. What you do need is proper market research. It will help you create a diverse portfolio, with viable shares from the West and the Orient. Monex trades in 12 markets, including Malaysia, so we keep a close eye on happenings there.

Our markets cover multiple currencies, nationalities, cultures, and exchanges. That’s why it’s part of our service to review global socio-politico-economic events and see how our clients can leverage them. We don’t trade on your behalf, but we do have consultants and account managers available in multiple languages, so you can get help any time you need it.

Headwinds and noise

Trump’s trade wars are affecting global trade from Iceland to Auckland, so traders are looking for safe spots in between. The FBM KLCI indexes the top thirty largest companies on the Malaysian stock market. It jumped past 1,700 points and is expected to hit 1,750 soon, given its 3.5% surge in mid-July. Malaysia offers cheaper stock options for international investors, so they’re expected to regain interest in this market.

Analysts like Nazarry Rosli believe this is because Malaysia’s forward PER of 16.09 is below her moving average PER of 19.24 over a 10-year span. Nazarry says 1,750 is do-able because “Malaysia’s simple moving average for the past 50 days is 1,757.66 points.” He did expect some resistance though, largely because of weak prices on key defensive stocks.

Redza Rahman cautiously agrees. He is the Head of Research at Malaysian Industrial Development Finance Berhad (MIDF). “Stocks like AirAsia Group, CIMB Group Holdings Bhd, Malayan Banking Bhd, Telkom Malaysia Bhd, Public Bank Bhd, and real-estate-based investment trusts are traditionally dividend bearing stocks that investors hold for the long haul, and since their market prices are taking a hit, some traders may use them for long-term shelter.”

Words with Mirae and JP

Over at JP Morgan, the optimistic outlook is reinforced by Richard Titherington. He’s their Chief Investment Officer for Asia Pacific Emerging Markets. He sees all this talk of a trade war as “just noise” and emphasises “discipline, a clear head, and focus on the fundamentals.” Rahul Chadha of Mirae Asset Global Investments suggests franchises instead.

“Yes, equities can and will self-correct,” he says, “but there are better opportunities in attractively valued franchise structures, for long-term growth in corporate earnings.” Also, before you dash to pay a ‘specialist’ stockbroker for offshore trading, do some research online. You’d be surprised how easy it is to do your own Malaysian investing.

To learn more about the Malaysian stock market, offshore companies worth investing in, or to open your own trading account, fill out our contact form and we’ll get right back to you.