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Malaysian Affin Hwang Investment Bank expects gold prices to average higher in 2020, helped by sustained accommodative monetary policies among major central banks. Using the TradePlus Shariah Gold Tracker exchange-traded fund (ETF) as an avenue to invest in the precious metal, Affin Hwang believes the ETF’s fair value is RM2.30. In 2019, the price of gold surged by 18.9% year-on-year (YoY) to US$1,523.1/oz compared to a decline of 2.1% in 2018 to US$1,309.3/oz. In the near term, Affin Hwang Capital believes concerns over the recent Covid-19 outbreak will likely continue to drive safe-haven flows into gold. Due to geopolitical concerns and low-interest rates, the World Gold Council noted that holdings in gold-backed ETFs hit an all-time high of 2,885.5 tonnes in 4Q19 compared to 2,858.8 tonnes in 3Q19 mainly from North American and European-listed funds.

Malaysia Building Society's (MBSB) planned merger with Bank Muamalat Malaysia is expected to create a financial services entity with a collective asset size of some RM60 billion. Affin Hwang Investment Bankwrote in a note today that MBSB and Bank Muamalat's assets were valued at RM41 billion and RM22 billion respectively. Nevertheless, there could be potential write-offs of the loan book subsequent to due diligence exercises, which is likely to follow suit. However, Affin Hwang also said they were not too optimistic about the merger, as previously there have been other merger discussions between Bank Muamalat and other parties that were unsuccessful.