By Dato’ Syed Paduka Mashafuddin
We expect economies to resume ongoing growth and an expansion of the recovery into developing countries. In 1H 2022, we expect global growth to be driven by economic reopening, the rundown of excess savings, and business restocking.
But growth rates will normalize in 2H22, with accumulated savings mostly exhausted, quantitative easing reduced, and economic reopening at the tail end. On supply-demand, mismatches will resolve as demand shifts from manufactured goods to services.
Energy prices will stabilize, as new production capacity comes online in key regions. This will reduce the pressure on consumers, interest rates, and corporations, and support capital markets.
With Malaysia achieving a vaccination rate of above 78%, investors are anticipating for the economy to reopen in a more sustainable manner, which will provide a much-needed boost to the sentiment and market.
Our house view remains favourable on reopening plays, laggards, as well as sectors with structural or secular growth stories. Despite any near-term market uncertainties, investors should remain invested in financials, consumer discretionary, basic materials, and selective technology sectors such as 5G, Fintech, Healthtech & Greentech, to name a few.
In addition, we favour sustainable investing supported by Carbon neutral pledges, the US rejoining the Paris Agreement, and substantial inflows into ESG funds and ETFs. We also believe that there are significant opportunities in both emerging and developed markets.”
Dato’ Syed Paduka Mashafuddin, Chief Executive Officer, Principal Islamic Asset Management and Head of Islamic Business, Principal Group
