With Malaysian stocks on the brink of their longest stretch of annual losses ever, one money manager is buying amid bets valuations and signs of shifting overseas sentiment will spur a rebound.
Gan Eng Peng of Affin Hwang Asset Management Bhd says earnings are stabilising after sinking to the lowest since 2011, while an undervalued ringgit may prompt foreigners to consider buying again. Overseas brokers he spoke to have signalled unusual interest in Malaysia, says Mr Gan, who took "big positions" in three of the largest stocks including Sime Darby Bhd and CIMB Group Holdings Bhd. The move comes in a market clouded by weak profits and a scandal linked to a state fund.
"After nine quarters of earnings disappointment, we could be reaching the end of the downgrade cycle," said Mr Gan, equities head of Kuala Lumpur-based Affin Hwang, whose Select Opportunity Fund beat 97 per cent of peers with an 11 per cent return in the past year.
"Foreign funds are on the hunt for ideas in Malaysia. The strong outperformance of Indonesia, political issues in Thailand and Philippines, could drive some re-balancing of monies into Malaysia."