TA Investment Management Bhd (TA IM) said it remains cautiously optimistic on Asian markets due to attractive valuations and resilient growth prospects, especially compared to the developed world.
"Asia remains a bright spot and among the highest growth regions in the world," it said in a statement today.
"Even with a slowing Chinese economy and a revised gross domestic product growth band of 6% to 6.5%, Chinese economic growth remains healthy. Outside of China, market focus has been more political with major elections in India, Indonesia and Thailand during the first half of the year," it added.
TA IM pointed out that Asian markets delivered a strong start to the year, rebounding from the weakness in 2018.
"Expectations about the pace and timing of future US interest rate increases shifted considerably, boosting appetite for emerging market and Asian assets," it said.
The fund manager also noted that there has been a softening in the US stance towards the implementation of trade tariffs against China. "Although no resolution has been reached, a deal of some kind seems much more likely given the impact that the tariffs have already had on global growth and investment," it added.
TA IM said in the short term, however, Asian markets will likely remain dictated by political factors and economic data, especially from the US and China.
"We remain focused on domestically orientated sectors with a preference for dividend growth opportunities over defensive high yield based on valuation differentials."
For one, the fund manager is positive on the Malaysian Real Estate Investment Trust (REIT) sector, noting that it is on a healthy growth path and the matured assets are able to withstand the challenges faced by REIT operators.
"The REIT Index performance is expected to be positive again for the year as its fundamentals remain intact. REITs are an excellent proxy to the Malaysian property market as unit holders can enjoy both capital gain and income distribution without the hassle of managing the assets on their own," it said.
TA IM also declared a gross income distribution of 0.30 sen for TA Asian Dividend Income Fund, which invests mainly in Asian stocks, and 1.60 sen for TA Asia Pacific REITs Income Fund, which invests in Asia-Pacific REITs and high dividend yield equities, as at April 30.