Investment trends – What is in store for Malaysians from 2021 and beyond?

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Has the market been idle since the COVID-19 pandemic came around? Did it stall as many expected? Was there recovery and how was everyone affected?

COVID-19 changed everything

Financial markets were affected globally because of the Coronavirus pandemic. No one would have expected the pandemic to happen that potentially crashed the global economy. But then again, many also did not expect the markets to recover so quickly either. For 2020, it was all about coping with the sudden changes. For 2021, it should all about recovering. Now that the vaccines are out and the world is expected to be getting back to its normal self in the coming months, the economy is expected to follow suit. What should Malaysians be aware of? We list out the coming trends to take note of.

Good investment options in Malaysia

  • Equities – Moving forward, the Malaysian economy is set to recover slowly but steadily. Don’t expect any bullish market for the remainder of 2021 and with the economy set to reopen in stages, corporate earnings will most likely experience a rebound. With cheap equities, they are great engines to invest in. The retail market, telco and commodities remain great options too.
  • Bonds and Sukuk – One of the better performing platforms in 2020 was the Sukuk asset class. This Islamic bond should be the one to look out for with certain Sukuk achieved more than 5% returns in 2020.

Still volatile markets

While Malaysians are starting to get their vaccines and investor confidence starts to return, you cannot take anything for granted. In the short term, the markets are still quite unstable. One of the biggest issues Malaysians feared during the pandemic is inflation. That would mean bond yields could go up and when that happens, stocks would go the opposite direction. The same could happen for both these markets. Hence, traders should be cautious of these signs.

Asian markets doing good

With more fiscal and financial support from the governments, the equity markets in Asia is looking to be on the up. Observers are confident that the economies will be performing above average for the remaining of 2021 and towards 2022 because they were undervalued due to the pandemic. For the long-term, several industries like e-commerce are extremely good.

Recovering economies across the world

Until the world gets to a full recovery, it would be some time before things go back to the way they were. Expectedly, 2021 is the year everyone is looking to the financial markets to bounce back. However, the first quarter has been slow although cryptocurrency prices have been skyrocketing (particularly BTC). The second quarter of 2021 is expected to be slow as well but will most likely pick up toward the end of the year (and as more people gets vaccinated).

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