Global economy to recover in 2H, supported by vaccine rollout

Affin Hwang Asset Management Bhd (Affin Hwang AM) managing director Datuk Teng Chee Wai said among other things, the recovery would be supported by the COVID-19 vaccine roll-out, which will allow the economy to start reopening.

"Developed markets are well ahead in terms of vaccination roll-outs to their population, while emerging markets are still struggling with a slower roll-out and this will affected the economic recovery," he said at Affin Hwang AM's 2021 Market Review and Outlook webinar today.

Meanwhile, Teng said Malaysia remains as an attractive investment market among its ASEAN peers, especially in the manufacturing sector.

Despite prolonged uncertainties within the rising geopolitical noise, investment opportunities still exist, he said.

Teng noted that the country's manufacturing sector is on a recovery path, propelled by a modest recovery in consumer spending on autos and household electronics, as well as continued spending on staples and building materials.

On May 5, IHS Markit said Malaysia's manufacturing sector recorded encouraging growth in April 2021 with its PMI climbing above the neutral 50.0 mark for the first time in ten months, and for only the second time since September 2018.

Malaysia recorded a PMI of 53.9 in April, the fastest rate of growth in the series' history since mid-2012.

On the ringgit's outlook, Teng said the local unit is expected to be stuck trading in a narrow range amidst a lack of fresh leads.

"Persistent worries about economic health and resurging COVID-19 cases are expected to boost demand for the greenback, hence, weaker Asian currencies, including the ringgit," he said.

The ringgit is likely to hit 4.1750 against the US dollar next week, mainly influenced by external factors.