Teera Chanpongsang and Bryan Collins, Fidelity International
Portfolio manager and head of Asian fixed income
Whilst we look at the investible universe on a stock by stock basis, broadly speaking, the infrastructure sector and companies with high import content could be negatively impacted.
Meanwhile, exporters and consumption stocks might benefit due to higher disposable incomes. Additionally, the oil and gas sector could also benefit should oil prices remain elevated. The currency (MYR) will probably weaken given the market doesn’t like uncertainties plus there are likely to be concerns over the new government’s fiscal spending.
‘Short-term, we may see market volatility given uncertainty around policy implementation. I have been underweight Malaysia for the past few years given risk reward and valuation issues. However, we may see some opportunities should policies move in the right direction,’ said Teera Chanpongsang, portfolio manager.
‘Back in the day, Mahathir was a pragmatic person and is less likely completely close the economy. After the initial kneejerk reaction of all fixed income asset classes, credit will likely be anchored by rating agency expectations. Inflation dynamics in the near term support lower rates for longer, so we would look into buying back our short local rates positions. MYR is more volatile to these uncertainties, but a lot of speculative positioning has eroded away,’ added Bryan Collins, head of Asian fixed income.