Skip to main content

Malaysia, A Safe Haven?

Back in 2005 and 2006, when most emerging markets were shooting through the roof, the KLSE underperformed and was widely ridiculed by local and international investors. 2007 saw KLSE doing a bit of catching up. Since the sub prime mess and the debilitating credit implosion, KLSE has managed to weather the stormy waters a lot better than other Asian markets. Since the beginning of the year, KLCI has only shed around 6% while Shanghai and Hang Seng have lost nearly 20%, even the Kospi has lost about 13%. Safe haven?

Why have we held up better? Elections, that's b.s. ... Its the currency, and then its the commodities.

Currency. Even thoough most currencies appreciated against the USD, Malaysia is one of the very few which has a staggering foreign reserves per capita, alongside with Taiwan and Singapore. Bank Negara under Zeti, has been under appreciated by all and they rightly have taken a low profile. Its not easy trying to rid yourself of the "cowboy central bank" reputation thanks to the people fiddling with risks back in the 80s and 90s.

Growth has been steady and inflation while being very hard to control, is not too bad compared to other nations. International investors looking at our balance sheet do think that the ringgit's upside is as good as the yuan. As the yuan is not internationally convertible, the ringgit's not too bad an exposure. If only we have a bigger ringgit bond market, then you can see some real action. The ringgit should break 3.0 against the USD this year. I see 2.9 as very achievable.

Needless to say, palm oil and oil prices have been very strong - both posting strong net benefits to our economy.

Other reasons include the fact that our big companies does not have a strong international exposure (though they really should)... none of our banks have any exposure to US subprime materially. Plus our economy rely a lot on US MNCs manufacturing in our country and then re-exporting back to US and other markets. US slowdown would not be reflected as such in KLCI as they are not listed locally.

Having said all that, I would not be buying stocks yet. Overall global macro picture still not sound.


Popular posts from this blog

My Master, A National Treasure

REPOST:  Its been more than two years since I posted on my sifu. This is probably the most significant posting I had done thus far that does not involve business or politics. My circle of close friends and business colleagues have benefited significantly from his treatment.

My Master, Dr. Law Chin Han (from my iPhone)

Where shall I start? OK, just based on real life experiences of those who are close to me. The entire Tong family (Bukit Kiara Properties) absolutely swear that he is the master of masters when it comes to acupuncture (and dentistry as well). To me, you can probably find many great dentists, but to find a real Master in acupuncture, thats a whole different ballgame.

I am not big aficionado of Chinese medicine or acupuncture initially. I guess you have to go through the whole shebang to appreciate the real life changing effects from a master.

My business partner and very close friend went to him after 15 years of persistent gout problem, he will get his heavy attacks at least…

PUC - An Assessment

PUC has tried to reinvent itself following the untimely passing of its founder last year. His younger brother, who was highly successful in his own right, was running Pictureworks in a number of countries in Asia.

The Shares Price Rise & Possible Catalysts

Share price has broken its all time high comfortably. The rise has been steady and not at all volatile, accompanied by steady volume, which would indicate longer term investors and some funds already accumulating nd not selling back to the market.

Potential Catalyst #1

The just launched Presto app. Tried it and went to the briefing. Its a game changer for PUC for sure. They have already indicated that the e-wallet will be launched only in 1Q2018. Now what is Presto, why Presto. Its very much like Lazada or eBay or Alibaba. Lazada is a platform for retailers to sell, full stop. eBay is more for the personal one man operations. Alibaba is more for wholesalers and distributors.

Presto links retailers/f&b/services originators with en…

How Long Will The Bull Lasts For Malaysia

Are we in a bull run? Of course we are. Not to labour the point but I highlighted the start of the bull run back in January this year... and got a lot of naysayers but never mind:

p/s: needless to say, this is Jing Tian ... beautiful face and a certain kind of freshness in her looks and acting career thus far

I would like to extend my prediction that the bull run for Bursa stocks should continue to run well till the end of the year. What we are seeing for the past 3 weeks was a general lull where volume suddenly shrunk but the general trend is still intact. My reasons for saying so:

a) the overall equity markets globally will be supported by a benign recovery complemented by a timid approach to raising rates by most central banks

b) thanks to a drastic bear run for most commodities, and to a lesser extent some oil & gas players, the undertone for "cost of materials" have been weak and has pr…