PETALING JAYA: Interest in fixed -income investment is growing amid the scrutiny of the domestic equity market.
Principal Asset Management Asean Investor Jesse Liew said the industry is now seeing an increase in interest in securities because of better securities. , as Bank Negara has raised its overnight interest rate (OPR) for the second time this year.
“Our findings show that the majority of investors who have converted to fixed income are both commercial and non -commercial investors, while commercial investors are slowly increasing in size. earns home equity after a weak equity market, ”Liew told StarBiz.
Typically, when interest rates rise, investors – which is one of the most common types of fixed investment options – see their prices fall.
“Basically, fixed -income investments in Malaysia are pretty good after the recovery of the domestic fixed -income market in the first half of this year,” Liew said.
He said the domestic stocks had been sold heavily — with the rise of OPR by Bank Negara and he hoped the stocks would continue to be marginalized and supported.
“Looking at that, we expect the fixed return to be positive while providing good returns in the future,” he said.
OCBC Bank (M) Bhd chief financial officer Michael Lai pointed out that while it is better to have fixed income than better customer support, promoted by equity arrangements everywhere, it is possible. consumer sentiment returns to head in the second half of 2022 on fears Economic problems continue.
Citing data from Bloomberg, Lai said stocks for Malaysian stocks had been on the rise in the past 12 months.
“But based on the latest data for May 2022, the flows in Malaysian stocks have changed dramatically.
“This may indicate an increase in interest in local bonds as well as an increase in interest rates to take the time away from misrepresenting high -profile local bonds.
“For investors who are worried about the prospects of a return, securities provide a level of protection from the volatility of risky assets as well as equities. So it doesn’t matter. it’s amazing to see new good flows in local markets, ”Lai told StarBiz.
That said, combined with inflation and weak growth exacerbating the risks of a recession, it won’t keep any assets with fixed income, he said.
He said that with the central bank leading the way in increasing interest rates, domestic real estate would be stopped.
But this does give investors the opportunity to get higher stocks in the stock market as fixed prices fluctuate to higher prices.
“Investors are willing to accept price volatility for the short term, and holding on to these holdings until maturity, local holdings provide investors with a fixed income in the market. kind of simple, ”Lai said.
He said the drug, as well as the side effects of inflation – arising from rising interest rates – had dominated negotiations in fixed -income markets since June.
“High shocks related to inflation data and a hawkish Federal Reserve situation combine to increase the risk of the bankruptcy.
“It’s unfortunate that the combination of steady growth and slow growth is going to be rosy for equity or fixed income,” Lai said.
However, he pointed out that this idea is not a bad thing at all “if investors take a long time to prepare their investments”.
“Markets have gone through a lot of repricing and the current reviews, we see how fixed income is supported if it doesn’t increase.
“But it’s important to choose the kind of good. We’re being careful, but getting hold of it these days is more of a necessity than a desire, so it’s really relevant. the question is about weight and giving, and this depends a lot on the desire and goal of the investor, ”Lai said.
Malayan Banking Bhd (Maybank) head of financial institutions, fixed income research, Winson Phoon said fears have eased the rise in the interest of the government but the assets are better when investors start to more worried about debt than interest.
“Malaysian government firms are expected to reconsider their grievances amid the growth of foreign heads,” he told StarBiz.
Maybank Asset Management Sdn Bhd chief investor Syhiful Zamri said that due to the high yields and its security nature, the company is seeing a flow of water into the fixed income.
“Investors have started to engage in fixed investments as yields have risen to pre-pandemic levels,” he told StarBiz.
Syhiful said that every year, as of June 30, the performance of real estate assets according to the Bond Pricing Agency Malaysia All Bond Index had fallen by 2.35%, compared to the stock market in recorded a fall of about 8%.
“We expect both stocks to provide good returns over the next 12 months with equities that will produce higher returns in real time, with a fixed income as a result of its return while the level of volatility.
“However, fixed income investors should be reassured because the current yields are high, thus offering better returns compared to fixed assets.”
OCBC’s Lai states that fixed income is an investment that is invested heavily in capital management and earnings and should not be compared to stocks or the like.
“These two asset classes offer different types of capabilities and challenges. They work as a package rather than as a company,” he said.
Lai said investing in real estate, which is often seen as a way to make money, provides a steady flow of income with less risk than stocks.
“But with the increase in financial assets in the market, it’s important now to differentiate between the high -income and low -income segments of fixed income.”