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Malaysia fund management assets up 10% in 2020 on bond and stock gains

The stock and bond gains were largely driven by a recovery of investor sentiment in the second half of the year after markets were roiled earlier by the coronavirus pandemic
By Goh Thean Eu   
February 26, 2021

Malaysia’s fund management industry assets rose 10% in 2020 with bond funds growing twice as fast as equities amid a market rally in the second half of the year as investor sentiment improved after being battered by the coronavirus pandemic.

The industry ended the year with 905.46 billion ringgit (US$224.39 billion) of assets under management, up from 823.19 billion ringgit in 2019, according to latest figures published on the website of Securities Commission Malaysia.

The regulator typically posts the data without providing analysis.

Bond fund assets jumped 18.41% to 215.08 billion ringgit from 181.64 billion ringgit in 2019. Assets of stock funds rose 9.26% to 437.22 billion ringgit from 400.15 billion ringgit previously.

The stock and bond gains were largely driven by a recovery of investor sentiment in the second half of the year after markets were roiled earlier by the pandemic.

The improved sentiment helped to fuel a stock market rally led by glove manufacturers, as global demand for rubber gloves escalated in the midst of the pandemic, according to a fund manager at a Malaysian asset management company. And the rollout of vaccines late last year raised hopes that the pandemic may end soon.

Malaysia is a major producer of rubber gloves. Top Glove Corp., which is listed on the local bourse, is the largest rubber glove maker in the world.

“In the second and third quarters, the rubber glove stocks were the key behind the rally. In the fourth quarter, when development of vaccines was showing good progress globally, the value stocks, such as banks and financial services companies, led the rally,” the fund manager tells Asia Asset Management, speaking on condition of anonymity.