The key to foreign funds

 

Malaysia must demonstrate strong leadership, execute its RM60 billion economic stimulus package well and take a firm stand against graft if it wants to attract foreign funds.

This is what some foreign fund managers said during a roundtable discussion at the CIMB Private Banking Investment Conference in Kuala Lumpur yesterday.

Stuart Winchester, managing director of Hong Kong's RCM Asia Pacific Ltd, said Malaysia is in a good position to benefit from such funds if it took those matters seriously.

"I recognise that there's a change (in leadership) that's going to be taking place here, and that throws up a new set of opportunities. My instinct is that it could be potentially good for companies and the stock market," he said.

Malaysia is among his top two market picks in Asean, the other being Thailand. Malaysia also features in his global portfolio.

His company, part of Allianz Global Investors, has some US$120 million (RM439 million) invested here, mainly in plantations and utilities.

On the RM60 billion stimulus package, he said it was key that this be managed properly, unlike the "dismal" execution of similar packages in the US.

He likes that there are many companies here with decently strong balance sheets, some of which are high-yielding stocks. However, he thinks there is room to quicken the pace of the restructuring of government-linked companies.

"Execution is critical and the pace of change needs to be quicker," he remarked.

On graft, Timothy Peach of Singapore's Man Investments, said it is the one thing that holds more money from being invested in emerging markets like Malaysia.

"If you can't cut back graft, that will stop your growth," said Peach, who is the company's executive director and head of sales for Southeast Asia.

Meanwhile, William Cassidy, managing director of Hong Kong's SEI Investments (Asia) Ltd, said the investment outlook this year does not appear to be as bad as last year. At present, investors are being cautious and are still looking for a market bottom.

In Malaysia, investors are starting to look at equities again, says CIMB Private Banking.

"Cash is no longer king. We're starting to get more phone calls from clients who want to know what to do with their money," said its co-head, Carolyn Leng.

Despite investors being more cautious, many continue to have the punter mentality, she said.

"We have so much difficulty convincing them to stick with a fund. But it's a long-term education process and this is the biggest challenge we face," she remarked.