KUALA LUMPUR: The second half of 2017 will continue to be positive for the stock market but valuations are becoming 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 – economic data continues to be robust and the recovery in corporate earnings is intact.
“However, valuations are getting rather expensive,” its chief executive officer and executive director Teh Chi-cheun said in a statement.
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.
“This should continue for the rest of the year but don’t expect such a stellar performance as occurred in the first half,” he said.
“Expect markets to be volatile but on an upward trajectory as we continue to face policy risk, where 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 US 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.
To wrap up the first half of 2017, Pacific Mutual announced income distributions amounting to RM7.8 million for investors of eight of its funds.
The company has declared annual income distributions of two sen per unit for Pacific Millennium Fund, 3.5 sen per unit for Pacific Recovery Fund, three sen per unit for Pacific SELECT Balance Fund, and two sen per unit for Pacific Real Opportunities Absolute Return Fund.
The company also declared quarterly distributions of 0.4 sen per unit for Pacific Cash Fund and 1.05 sen per unit for Pacific Emerging Market Bond Fund.