KUALA LUMPUR: Poh Kong Holdings Bhd expects gold prices to remain firm in the medium term, supported by the demand from government vaults and central banks.

       Citing analysts, Poh Kong executive chairman and group managing director Datuk Choon Yee Seiong (pic) said the yellow metal prices is expected to inch up further in the new year, adding that gold has historically performed well amid equity market pullbacks and high inflation.

       And Poh Kong is expected to benefit from firm gold prices.

       “Gold has always been the preferred choice of asset class for wealth protection. Added to this is a pressing need for exchange-traded funds,” he said in Poh Kong’s Annual Report.

       “When interest rates are low and financial stress high, analysts agree that investments then tend to move into gold,” he added.

       Gold prices are currently hovering around US$1,800 (RM7,518) an ounce.

       The prices of the yellow metal prices fell about 5% last year as economies recovered from the impact of the pandemic, reducing demand for safe-haven bullion.

       Citing analysts, Poh Kong executive chairman and group managing director Datuk Choon Yee Seiong (pic) said the yellow metal prices is expected to inch up further in the new year, adding that gold has historically performed well amid equity market pullbacks and high inflation.

       Poh Kong’s shares were last traded at 80 sen, representing a decline of 3% over 2021.

       According to Fitch Solutions, gold prices are expected to remain elevated in the coming years compared to pre-Covid levels.

       Choon said Poh Kong is well positioned to benefit from these trends.

       He remained optimistic that the group’s performance would be better in the financial year ending July 31, 2022 (FY22), supported by a strong demand for gold jewellery and investments.

       “We believe we are in a good position to register higher revenue this year based on activity in the commodity markets, and are poised to capitalise on demand when the Covid-19 situation improves,” noted Choon.

       Given that Malaysia’s economy is forecast to expand between 3% and 4% this year, he said Poh Kong would leverage on this expansion to plan its own growth strategies.

       The reopening of the economy would support a gradual recovery in the fourth quarter of 2021, with higher global growth and sustained policy support providing a further lift to the overall economy, he added.

       For 2022, Choon expects recovery to accelerate, supported by a gradual normalisation of economic activities as well as the positive spillover effect from continued improvement in external demand.

       Despite the economy battling the Covid-19 pandemic, he said the group is well prepared for the next “new normal” as it is poised to stage a robust post-recession recovery.

       “We are on track for a strong but predictably uneven growth,” he opined.

       Nonetheless, Choon conceded that the group is continuously monitoring the impact of the current uncertainties of its operations although external factors are beyond its control.

       “Barring unforeseen circumstances, the board of directors are confident that the group has put in place adequate measures to meet the challenges ahead for financial year 2022 (FY22),” he said.

       For FY21, Poh Kong’s net profit jumped 50.45% to RM36.76mil from RM24.43mil a year ago.

       Meanwhile, the group’s revenue rose 20.61% to RM903.10mil in FY21 from RM748.8mil in FY20 on the back of the increased demand for gold jewellery and gold investment products.