KUALA LUMPUR - A massive outflow of foreign funds caused by jitters over sooner-than-expected quantitative easing (QE) tapering is not expected in the region, according to CIMB-Principal Asset Management regional chief investment officer Raymond Tang.
He said this was because fundamentals in the region remain intact, adding that money would flow into Malaysia which was deemed as a safe haven and by default, a less volatile environment.
He was speaking to reporters after the AsianInvestor Award presentation. CIMB-Principal was presented the AsianInvestor's Investment Performance Award 2013 for Asian Fund House of the Year.
He opined that Malaysia had been a laggard when regional markets rallied but when the other markets were sold down, Malaysia felt the least impact. "News of the Fed tapering the QE programme is three-year old. It is natural for the stimuli to come to an end when the global economy growth is back on track," he said, adding that the world economic growth was expected to remain slow but stable.
He pointed out that the growth arbitrage between emerging markets and the United States narrowed to 2 per cent from 6 per cent previously.
When asked if investors would shift their focus to the giant economy, he said he did not expect a massive outflow from the region as fundamentals remained largely intact.
He believed that Asian markets, particularly the ASEAN region, would remain robust as it had been overlooked by investors.
"China has outshone ASEAN markets," he said.
Industry-wise, he favoured the telcos, consumer staples and energy, which included oil and gas as well as utilities.
He said there were many Asian stocks that gave a total return of 49 per cent and above. He anticipated markets to be volatile for the next two to three months as investors react to news inflow.