Uncertainty in Malaysia? My personal 4 signs.

A very capable friend posted in Facebook earlier. With the Ringgit’s depreciation, she felt that Malaysia will be going Greece’s way; financial crisis. In brief, Greece has stopped negotiating for European Union (EU)’s financial assistance and will most probably default on IMF’s payment and perhaps in the near future, no longer a member to EU. This has dragged Euro down thus far. Is Malaysia going to be the next Greece? If we are, first things first, start withdrawing your money from the bank. The reason is because the Greek government has shut ALL banks and everyone can ONLY withdraw Euro60 per day for their daily expenses.
However, let me tell you my personal 4 signs of potential economic distress for Malaysia. Nope, this do not need complex calculations like that of the three international rating agencies. It does not even need to depend on any politicians who seem to be so awesome with economics but kept giving stupid advice all the time. Plus the many ‘objective’ Malaysians who thinks the political party they support are full of angels and the other side is always wrong no matter what they do. Haha.
First sign. If Ratings from the international rating agencies start sliding downwards. Even though I feel that these international rating agencies also have their own agenda but I think for a small country like Malaysia, their objectivity is enough to gain my trust. As soon as two rating agencies downgrade us, we better be prepared and not be too bullish. Hold only undervalued stocks please.
Second sign. Bank Negara Malaysia’s governor, Tan Sri Dato’ Dr. Zeti Akhtar Aziz tendering her resignation SUDDENLY before her contract ends OR someone replaced her before her contract ends. Where would she go? For sure it is NOT to any political parties. I wish she can enjoy her time is she leaves and perhaps even devote some time to her alma mater, Wharton School of the University of Pennsylvania. (ONLY ranked 3rd in the world by Financial Times for management school)
Third sign. Look at the property market. When BOTH transactions and prices starting to fall in tandem for two quarters, better start preparing for harder times ahead. The reason is simple, without a good and stable income, there’s is no way that one can save enough money for a home. When no one is able to buy, prices would have to go down to a level that the majority are comfortable to buy.
Fourth sign. It’s very, very tough to get a loan for a property. In other words, banks start to be very prudent about whom they lend to. Look at Non Performing Loans. If it goes up continuously, the banks are in trouble. Do note that NPLs do not suddenly happen. So, when it happens, it meant that the market is no longer rosy even if we could still see people in Starbucks, ok?
Who am I? Nobody then, still nobody today. Disagree with my four signs? It’s ok. It is just my personal guide. Please set your own signs so that it can guide you to know when is the crisis coming. Oh yeah, I hope the signs that you are using does not include all the ‘great’ postings on Facebook. For your information, majority of those doing well from their investments will not post in Facebook about how rich they have become. Happy researching and reading, fellow Malaysians.
written on 1 July 2015
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