KUALA LUMPUR, Malaysia, Dec. 31, 2014 /PRNewswire/ -- In a statement today, Koh Huat Soon, the chief investment officer of Pacific Mutual Fund Bhd, an investment management company under the OCBC Group, with internal resources to manage both local and global investments for its clients, mentioned that the country's GDP is still resilient despite the recent plunge in oil price.
"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. Malaysia's current account is unlikely to fall into deficit even if Brent falls to $50/barrel" says Koh.
Koh further comments that as oil accounts for 30% of the government's revenue, there are fears that the government will miss its budget deficit target of 3% in 2015 with dire consequences on its sovereign debt rating. While a valid concern, Pacific Mutual is of the view that policy flexibility will be exercised in order to minimize the negative impact on government revenue. The company believes that Petronas has the capacity to raise its dividend payout and scale back capital expenditures, with priorities of such cuts affecting projects abroad rather than domestic.
"Our advice to existing investors invested in Malaysian equities is to hold on to their investments, so long as they are invested in undervalued companies, with sound balance sheets and competent management. These stocks will work out well in the long term as they will overcome short-term business challenges, irrespective of the sectors they are in. 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 same statement, Pacific Mutual announced the following income distributions for the financial year ended 31 December 2014 for three of its funds:
| Pacific Dividend Fund |
- |
5.00 sen per unit |
| Pacific AsiaPac Income Fund |
- |
3.00 sen per unit |
| Pacific Cash Fund |
- |
0.30 sen per unit (quarterly distribution) |
PACIFIC MUTUAL FUND BHD is a subsidiary of Lion Global Investors Limited (formerly known as Lion Capital Management Limited), a company incorporated in Singapore since 1986. Both companies are members of the OCBC Group. As at end of 2014, Pacific Mutual manages close to RM1.6 billion on behalf of its unit trust investors and private mandate clients.
MEDIA CONTACT:
Cindy Thean
+603-7725-9877 ext. 226
cthean@pacificmutual.com.my
Geraldine Choong
+603-7725-9877 ext. 124
geraldine@pacificmutual.com.my
