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HSBC, UBS upgrade Malaysian stocks on US-China trade war

HSBC, UBS upgrade Malaysian stocks on US-China trade war

Mubasher: Switzerland-based UBS Group on Wednesday revealed it has upgraded Malaysia’s stocks to “overweight” from “neutral,” according to CNBC.

This announcement has been made a day after the British financial services company HSBC said it upgraded the Southeast Asian country to “neutral” from “underweight.”

Several banks have recently upgraded Malaysian stocks for being steady amid the recent escalation in the US-China trade war.

The Kuala Lumpur Composite Index, the benchmark of Bursa Malaysia, has lost nearly 5% so far this year.

Numerous foreign investors have been cautious about investing in Malaysia for being one of the worst-performing Asian emerging markets.

However, many investors have reconsidered investing in the Asian state at a time the tensions between the US and China are accelerating despite concerns over the new government’s economic agenda.

“We think the economy looks resilient, with domestic demand strong and manufacturing growth holding up. Low earnings growth is a concern but we see limited further downside. Valuations, while not as attractive as other markets in the region, are not particularly expensive,” HSBC said in a report on Tuesday.

Europe’s largest bank also indicated that the Malaysian market has solid defensive qualities that could ease downside risks if trade tensions escalate.

Moreover, UBS noted that Malaysia fits their market requirements as “defensive” and offering “safety” amid the current global environment.