International lender, HSBC sees the first half of 2024 as a good time to unlock wealth and investment opportunities, on the back of a healthy Malaysian economy and resilient middle- class spending.
Linda Yip, Country Head of Wealth and Personal Banking, HSBC Malaysia says that Malaysia is expected to continue to see an upward trajectory in terms of liquid assets held. “Malaysia’s onshore wealth pool is sizeable at US$359 billion in 2022, and
this is expected to grow at a compound annual growth rate (CAGR) of 3.7% over the next few years.
“We believe that the right ingredients are in place for this to materialize. From a regional perspective, the growth in private wealth in Asia, resilient spending amongst 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.
“From a domestic standpoint, the Malaysian economy is expected to see growth this year. This will be supported by an expansion in consumption and investment spending and a favourable labour market, all which are conducive for unlocking
investment opportunities,” says Yip.
Looking at the investing trends amongst its customers, Yip notes that they have been broadly funnelling their wealth into financial instruments such as unit trusts, structured investments and bonds.
In terms of the outlook for investments, HSBC Global Private Banking expects the beginning of Fed 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. James Cheo, Chief Investment Officer, Southeast Asia and India, Global Private Banking and Wealth, HSBC, highlights Malaysia should benefit from the green shoots of recovery from the global electronic cycle. “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% GDP growth in 2024, slightly faster than last year’s growth.” notes Cheo.
“On Malaysia equity market, the consensus earnings for Malaysia are expected to be healthy. The valuation of the equity market is trading below its historical average. 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.”
HSBC forecast the MYR to stay stable at 4.55 against the USD by the end of 2024,” says Cheo.
“Disinflation is on track in most Asian economies, with inflation now expected to return to central bank target ranges in 2024 in most countries, ahead of most other regions. We believe Asian yields are peaking and expect policy rate cuts in Australia,
mainland China, Hong Kong, India, Indonesia, South Korea, the Philippines and Singapore in 2024 to bring policy tailwinds for the Asian bond markets in the coming year,” says Cheo.
