KUALA LUMPUR (Jan 24): While the equity market in the first half for Asia including in Malaysia is expected to perform in the first half of 2018, at current level it might not be the most ideal time to enter the market, according to Affin Hwang Asset Management Bhd’s managing director Teng Chee Wei.
While the statement sounded contradictory, Teng explained to the media in his market outlook and company briefing today that the stock market’s rally is on the back of very strong economic data.
“This rally is at the back of a very strong economic data that we have seen. Earnings have continued to surprise the market on the upside and supportive of the market. It’s not only in the US (United States) or the developed markets but it’s even in the emerging market,” Teng said.
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Macroeconomics doing well and companies continuing to deliver earnings has led to valuation being at a level that is above its average, Teng highlighted. If earnings continue to see upward revision, the equity market’s positive trend is expected to continue.
“When market is (in a) frenzy, you can’t tell people not to invest. Greed and fear play the role…It’s a question of how long you want to invest…Prepare to average down if you invest in today’s environment. At current level, it’s probably not the most ideal time to buy in,” Teng told the media when asked if it was too late to enter into the stock market now.
Teng however shared that Affin Hwang continues to remain in the market with a view that it is too early to exit the market.
“You can’t time the market perfectly…at the moment, we’re not selling on the rally as we think it’s still too early,” Teng added.
He highlighted one key factor among others to watch out for is earnings revision. He pointed to the importance of the period between late February to March, as it would be the corporate earnings’ season, where companies report their last quarter’s financial results in 2017.
“As long as [the] earnings revision trends continue, the market should do well,” Teng said.
http://www.theedgemarkets.com/article/now-not-most-ideal-time-enter-market-says-affin-hwang-asset-management
