KUALA LUMPUR, June 30 (Bernama) -- Standard Chartered Bank (StanChart) said Malaysia's equity market is doing quite well going into the second half of the year.
However, the market has been quite defensive although other markets are moving to a more pro-risk capital environment, its Chief Investment Strategist Steve Brice said.
"There is also some political uncertainty ahead of the election but that's not a major focus of our analysis," he said in a media briefing on the investment outlook for the second half of 2012 here Friday.
Brice said the global equity market has seen a shift towards a more 'risk on' environment as equities have rebounded strongly from oversold levels despite continued concerns about the situation in Europe.
He said corporate high-yield bonds have resumed their trend outperformance against G3 (the United States, Europe and Japan) sovereign debt.
"Commodities have also rebounded off their lows while the greenback has weakened from its highs while Asian currencies have generally come off their lows," he said.
Brice urged investors to raise exposure to attractively valued risk-seeking assets such as global equities, high-yield bonds and Asian local currency debt.
He said StanChart expects Europe to once again come to a situation where significant action is likely from policymakers including the European Central Bank.
Historically, any such monetary stimulus has been very positive for risky assets, he said.
"We reiterate our view that weakness in global equities, particularly high dividend equities and equities in the US, China, Korea and Russia offer an opportunity for those who are under-invested to increase their exposures," Brice said, adding StanChart continues to like the tech sector in the US and South Korea as well as oil and gold mining sectors.