Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (Dec 31): Malaysia will not fall into a current account deficit situation even if Brent crude price falls to US$50 per barrel, says Pacific Mutual Fund Bhd.

“Although a number of sources pose headwinds to economic growth going into 2015, we believe that the economy has sufficient resilience to withstand these stresses, the most pressing of which is the recent collapse in oil price,” the firm’s chief investment officer Koh Huat Soon said via a press statement today.

Koh believes that despite oil receipts accounting for 30% of government’s revenue, “policy flexibility” will be exercised in order to minimise the negative impact, one of which is that Petroliam Nasional Bhd (Petronas) could raise its dividend payout and scale back capital expenditures.

“Malaysia’s current account is unlikely to fall into deficit even if Brent falls to US$50 per barrel,” he asserted.

“Our advice to existing investors in Malaysian equities is to hold on to their investments, so long as they are invested in under-valued companies, with sound balance sheets and competent management,” he said.

Irrespective of the sectors, Koh believes these stocks will work out well in the long term, while overcoming short-term business challenges.

“We would even advise them to invest more in times of price weakness and the present time offers just that rare opportunity,” added Koh.

In the statement, Pacific Mutual also proposed a five sen and three sen per unit income distribution for its “Pacific Dividend Fund” and “Pacific AsiaPac Income Fund” respectively for the financial year ended Dec 31, 2014 (FY14).

On top of that, there will also be 0.3 sen per unit quarterly income distribution for its “Pacific Cash Fund”.

 

      Print
      Text Size
      Share