A Straits Affair
Real estate and construction are some of the sectors that the UOB Asset Management favors. Wong said that UOB Asset Management “firmly believes that Malaysian property companies are only starting to enjoy the initial fruits from the lifting of the property capital gains tax. Also, some Singapore companies are benefiting from the structural changes which led to an increase in demand for building materials and property.”
The performance of the UOB UniFund is benchmarked against a blended return of the Straits Times Index and the Kuala Lumpur Composite Index. UniFund has soared just over 20% over the last 12 months.
Malaysia and Singapore are attractive, 'safer' destinations for investment dollars. Investors should look to them as part of a diversified portfolio. However, ASEAN Investment Management’s Roes, believes that companies there are already fairly priced. He feels that investments in these two countries will only perform with the markets and will not generate higher-than-expected returns.
“From a value perspective, I like businesses that may be holding undervalued assets, companies that have strong balance sheets, are generating strong cash flows, but for whatever reasons are undervalued by the market. There are still good opportunities in Malaysia and in Singapore, but its harder to find those opportunities,” he said.
Still, Roes agrees that the real estate and constructions sectors are looking extremely attractive. “Any company that has large land holdings under balance sheets that haven’t been revalued, with the valuation going on in the market, that is a good opportunity. I would look for the publicly-listed companies that are doing business for the contractors and providing support services because they also will benefit,” he said.
Roes has this word of advice for investors - buy into the markets with a long-term perspective and it will pay off handsomely in the end. “I invest with a two-year horizon, but I am always looking out three to five years. The Asian region has a strong super-cycle to go through. It is evident now, but it will continue at least for 3 to 5 years.”
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