Speaking with StarBizWeek, MIDF Research head Imran Yassin Md Yusof agrees that dividend yields in the local stock market look more attractive, following the recent selldown in equities.
However, with fears of a recession mounting and the risk of corporate earnings potentially taking a hit, not many companies would be able to offer a sustainable dividend payout. Meanwhile, fund manager Thomas Yong says that investors with lower risk appetite and looking for regular income will consider investing in dividend stocks, especially during periods of heightened market volatility. Yong, who is the CEO of Fortress Capital Asset Management, believes the market will remain volatile“This is as Malaysia’s economy is expected to perform better vis-à-vis last year and advanced economies.“Hence, it is a matter of valuation more than anything else.
“We suggest that investors look out for companies with good track records on dividend payouts, and earnings not or less negatively affected by interest rate hikes. Fears of a recession has intensified in recent weeks as central banks across the world focus on fighting high inflation with higher interest rates.These include Citigroup, which is forecasting a near 50% probability of a global recession.
Such fears of the macroeconomic outlook have been hammering global stocks. The MSCI World Index, which captures large and mid-cap stocks in 23 developed markets, has declined by 21.3% this year up till June 23.