KUALA LUMPUR (Jan 4): There could be a big shift from growth to value stock investing across ASEAN markets which include Malaysia in the second half of 2022 "if the world goes back to normalcy" as the global economy recovers from the impact of Covid-19 pandemic-driven movement restrictions, according to Maybank Investment Banking Group head of regional equity research Anand Pathmakanthan.

"If there's a switch back to value, [Malaysia's FBM] KLCI should do pretty well as they have all the stable and cyclical stocks with decent [dividend] yields," Anand said on Tuesday (Jan 4, 2022) at a market outlook webinar organised by Maybank Investment Bank Bhd.

In equities investment terminology, growth investing is a strategy in which investors buy shares of companies which are expected to achieve higher growth versus the broader market.

Meanwhile, value investing involves buying equities which are transacted at a discount to their intrinsic worth.

ASEAN is a regional grouping comprising 10 nations, namely Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

For ASEAN as a whole, Anand said the key driver is the fact that six countries have already achieved Covid-19 vaccination for over 70% of their respective population, hence, providing clarity on the economic recovery path for the region.

"ASEAN [equities are] looking very cheap, and what you really need for ASEAN to perform is a clear runway to normalcy. That's what is going to bring capital back into domestic markets, away from growth like the US or China," Anand said.

"Dividend yields across ASEAN are extremely attractive. If you look at just yields as a thematic, ASEAN does stand out as a viable alternative asset class," Anand said.

The dividend-yield thematic is also seen in Malaysia, where the KLCI is still dominated by old economy sectors like banking, telecommunications, utilities and plantation, according to Anand.