HSBC: MALAYSIA TO CONTINUE SEEING UPWARD TRAJECTORY IN LIQUID ASSETS HELD

KUALA LUMPUR, Jan 22 (Bernama) -- HSBC Bank Malaysia Bhd expects Malaysia to continue to see an upward trajectory in terms of liquid assets held in the first half of 2024 (1H24).

HSBC Wealth and Personal Banking country head Linda Yip said Malaysia’s onshore wealth pool stood at US$359 billion in 2022, and is expected to grow at a compound annual growth rate (CAGR) of 3.7 per cent over the next few years.

She said from a regional perspective, the growth in private wealth in Asia, resilient spending among the middle class, the acceleration of digital transformation and the green economy are a boon for economic growth, despite headwinds seen in the global economy.

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“From a domestic standpoint, the Malaysian economy is expected to grow this year, supported by the expansion in consumption and investment spending and a favourable labour market; all of which are conducive for unlocking investment opportunities,” she said in a statement today.

Commenting on the investing trends, Yip noted that HSBC Malaysia’s customers have been broadly funnelling their wealth into financial instruments such as unit trusts, structured investments and bonds.

There has been much interest in defensive investments, such as money market funds and principal-protected investments.

“We think that having a diversified portfolio in both equities and fixed income makes sense in order to capitalise on the interest rate reset cycle,” she said.

In terms of the outlook for investments, HSBC Global Private Banking expects the beginning of the United States (US) Federal Reserve rate cuts in June 2024, US soft landing, corporate earnings recovery and solid Asia growth to improve global risk appetite and investment outlook of equity and bond markets in 2024.

HSBC Southeast Asia and India, Global Private Banking and Wealth chief investment officer James Cheo said Malaysia should benefit from the green shoots of recovery from the global electronic cycle.

He said Malaysia’s economy should remain healthy this year, powered by resilient consumer and investment spending.

The positive fillip for Malaysia’s economy will come from the nascent recovery of the global electronic cycle and the resumption of global tourism travel.

“We expect Malaysia’s economy to grow by 4.5 per cent in 2024, slightly faster than last year’s growth,” he said.

On Malaysia's equity market, Cheo said the consensus earnings for Malaysia are expected to be healthy.

“The valuation of the equity market is trading below its historical average, and global risk sentiment and international investor positioning could be headwinds for the market.

“At this juncture, we want to be prudent and very selective with our Malaysia equity strategy,” he said.

Meanwhile, inflation should continue to remain subdued in Malaysia this year.

However, there could be an inflationary impact from the increase in service tax and reduction in fuel subsidies.

“We think that Bank Negara Malaysia will continue to remain on hold and keep policy rates at three per cent for the rest of this year and we forecast the ringgit to stay stable at 4.55 against the US dollar by the end of 2024,” added Cheo.

-- BERNAMA