Market sell-off a knee-jerk reaction to coronavirus, says PMB Investment

The institution is confident that valuations are still strong based on the reaction towards the previous SARS outbreak and value of domestic equities


THE heavy sell-off across domestic financial markets due to the coronavirus outbreak is just a knee-jerk reaction, while Malaysia’s economic fundamentals and growth remain intact, said Islamic fund management company PMB Investment Bhd.

Its CEO Najmi Mohamed said the institution and its fund managers are confident that valuations are still strong based on the market reaction towards the previous SARS outbreak and the value of domestic equities.

During the first quarter of 2003, at the height of the SARS outbreak, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell almost 8%, he said.

“By the end of the year, the FBM KLCI gained more than 20%. It was eventually a knee-jerk reaction because Malaysia’s fundamentals and growth were still intact.

“Like today (Feb 4), the FBM KLCI is already 21 points up. That is a knee-jerk reaction from the previous one week or so,” Najmi told reporters after a memorandum of understanding (MoU) signing ceremony between PMB Investment and Bank Simpanan Nasional Bhd (BSN) in Kuala Lumpur (KL) yesterday.

The FBM KLCI rallied alongside other major indices worldwide yesterday, closing 0.9% or 13.85 points higher at 1,535.8 as bargain hunters moved in after days of heavy selling.

Amid heightened fears over the coronavirus, PMB Investment, which offers unit trust and fund management services, continues to rebalance its portfolio from time to time in order to select the best stocks for its investors, Najmi added.

“We choose carefully what kind of sectors we go into. When the coronavirus broke out last month, we had already positioned ourselves in most of the healthcare and glove sectors.

“We foresee that these sectors will benefit the most compared to sectors like tourism, which have been affected the most during this period of time,” he stated.

At the ceremony, the fund management firm, which is a wholly owned unit of Pelaburan Mara Bhd, inked an MoU with BSN to promote and distribute its products through BSN branches nationwide.

At this initial stage, BSN will promote and distribute two unit trust products under PMB Investment, namely PMB Shariah Premier Fund (Equity Fund) and PMB Shariah Cash Management Fund (Money Market Fund).

For the first year, PMB Investment targets to secure a minimum of RM10 million sales by the end of 2020 to provide sustainable returns for its investors.

With the introduction of these funds, existing and potential customers are expected to benefit from a diverse range of products, encompassing a bigger investment universe while aiming to maximise returns.

BSN CEO Datuk Yunos Abd Ghani said PMB Investment will benefit from BSN’s nationwide network of branches through 30 qualified wealth advisors.

“The cooperation will allow BSN to serve an extensive range of financial products to our customers and provide a better investment solution in today’s growing financial market.

“At the same time, we hope to encourage more Malaysians to save and invest in innovative products in order to improve their financial plans in today’s progressive, modern lifestyle,” he said.

The collaboration is also aimed at enhancing the distribution channel, as PMB Investment is a stand-alone asset management company and is not affiliated with any financial institutions.