The second half of 2017 will continue to be positive but valuations are getting rather expensive, said Pacific Mutual Fund Bhd.
“In the first half of 2017, market bullishness was driven by ‘Trumpflation” and the continuation of a global economic recovery. The second half of the year would continue to be positive as economic data continues to be robust and the recovery in corporate earnings is intact,” said its CEO and ED Teh Chi-cheun.
However, Teh said valuations are getting rather expensive.
“Expect markets to be volatile but on an upward trajectory as we continue to face policy risk, where the US is the key player to watch.
“America’s journey to “become great again” has been blocked by delays in healthcare reform, which affects the roll-out of Trump’s fiscal stimulus and the expected boost to the US gross domestic product (GDP). It is highly likely that the UK will have a new Prime Minister and in China, there will be the National Congress,” he said.
Teh said the past six months has seen an increase in political and policy risks but the market has absorbed all of it very well and has performed exceptionally.
He said this should continue for the rest of the year but don’t expect such a stellar performance which occurred in the first half.
Pacific Mutual also announced income distributions amounting to RM7.8 million for investors of eight of its funds. It has declared annual income distributions of 2 sen per unit for Pacific Millennium Fund, 3.5 sen per unit for Pacific Recovery Fund, 3 sen per unit for Pacific SELECT Balance Fund and 2 sen per unit for Pacific Real Opportunities Absolute Return Fund.
The company also declared quarterly distributions of 0.4 sen a unit for Pacific Cash Fund and 1.05 sen a unit for Pacific Emerging Market Bond Fund.