This article first appeared in Wealth, The Edge Malaysia Weekly on March 24, 2025 - March 30, 2025

Kenanga Investors Bhd, a subsidiary of Kenanga Investment Bank Bhd, took home a total of five awards at the LSEG Lipper Fund Awards 2025. It has been a constant winner in the Mixed Asset category in the past five years.

Its chief investment officer, Lee Sook Yee, says the fund house’s best calls were Sunway Bhd and Gamuda Bhd. Both stocks were core holdings for its funds, which were invested before 2024, but experienced a major rerating that year.

Lee says Sunway was rerated due to the market’s strong interest in its Iskandar Johor land bank, robust order-book wins in its construction division and the value realisation from the upcoming listing of its healthcare division.

Meanwhile, Gamuda saw rerating mainly on strong order book wins in regional and local markets while gaining exposure into the fast-growing data centre industry in Malaysia, she explains.

“Our conviction in holding on to these stocks underscored our deep understanding of the companies’ business, management and their intrinsic value,” says Lee.

Throughout 2024, Kenanga Investors maintained low cash levels for most of the year to capitalise on emerging opportunities.

“However, in the latter half of the year, we raised cash, as external uncertainties such as the US election and a slowdown in China’s growth emerged. This strategy helped us preserve flexibility amid rising risks,” says Lee.

There was no significant rebalancing exercise during the year, she adds. Its adjustments were primarily tactical, driven by macroeconomic events rather than a fundamental shift in its overall allocation.

As Kenanga Investors reflects on Malaysia’s economic performance in 2024, the firm acknowledges the country’s strong GDP expansion, increased foreign direct investment (FDI) and export recovery in the first half of the year. However, it also notes the market volatility in the third and fourth quarters due to global recession fears; interest rate shifts in major economies, such as the US and Japan; and uncertainties surrounding the US election.

In response, Lee adopted a strategic approach in 2024. Her strategy emphasised sectoral exposure to high-growth industries such as construction, property, utilities and data-centre supply chains.

“These industries benefited from Malaysia’s infrastructure development, strong FDI inflows and supply chain realignments,” says Lee.

Lee also prioritised stock selection, targeting companies with strong fundamentals, high-quality and solid execution to withstand market volatility.

Additionally, she implemented a proactive risk management framework. “Our risk management framework played a crucial role in responding to macroeconomic shifts and maintaining flexibility through portfolio repositioning,” says Lee.

As bottom-up stock pickers, Kenanga Investors’ investment philosophy hinges on fundamental research and a relative value approach to generate superior, risk-adjusted returns.
focusing on high-quality stocks through rigorous analysis, the firm aims to achieve consistent outperformance over a three- to five-year investment cycle.

“Our approach involves a deep dive into industry dynamics, company business models and key drivers of return on equity. We conduct thorough channel checks to assess competitive advantages and growth drivers, with a focus on management quality, sustainability, industry trends and balance sheet strength,” explains Lee.

In 2025, Kenanga Investors’ fund managers will continue to focus on selective stock-picking, while maintaining a higher-than-usual cash allocation to preserve flexibility amid ongoing external uncertainties.

“We will focus on sectors tied to Malaysia’s domestic growth story, such as financials, construction and healthcare, while complementing this increase in defensive holdings. Selected small-cap stocks could present an opportunity, especially after their underperformance compared with large caps in 2024,” says Lee.

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