PETALING JAYA: Growth prospects for the healthcare sector is seen to be positive over the long term due to an ageing population, rising affluence and an increasing life expectancy. The local private healthcare sector has an added catalyst of medical tourism backed by highly competitive charges and hospitalisation costs, a generally English-speaking population and various government incentives, according to AmInvestment Research.

The research firm’s top pick is KPJ Healthcare Bhd with a “buy” call and fair value of RM1.14, due to its vast network of hospitals in Malaysia and potential growth from overseas expansion.

It has a “hold” call on IHH Healthcare Bhd with a fair value of RM5.58 for its position in the premium segment of the private healthcare sector although it is cautious of risks from its Turkish operations.

On the downside, local private operators may be negatively impacted by the weakening ringgit versus the US dollar although a cheaper local currency may also boost the country’s medical tourism volume.

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