Ringgit strongest, comparatively. Malaysia is positive. Nomura disagrees.

Many months back, a colleague was telling another colleague that with the ringgit’s value which is continuously dropping, her online shopping was taking a big hit. Things were 40 percent more expensive. I told her that ringgit has actually dropped but it’s definitely nowhere near 40 percent. She said, ‘It may happen you know.’ Seriously, if it happens, both she and I would be out of job. No idea why she would want that anyway. Malaysia’s current investment grade rating by all the three international rating agencies would be gone. External investors would pull back and invest their money somewhere else. They need returns, not a 40 percent drop in the value of their investments. Fortunately for that friend and me, ringgit has been performing well this year. In fact, this was the headline by Bloomberg just days ago. “The Ringgit is easily Asia’s strongest currency.”
Other stuffs from the Bloomberg’s article. Why has ringgit been recovering? The article quoted a few positives as follows. Exports are accelerating and GDP growth was 5.6 percent last quarter. FTSE-Bursa Malaysia hit its highest point in 2 years. This is what Schroder Investment Management Ltd’s Singapore-based fixed-income director Manu George said, “Key considerations are improving fiscal dynamics, dynamics around central bank policy, attractive economic policies, sensitivity to developed market and China developments.” (Generally, he is positive with Malaysia)  It can’t be all good right? 🙂
Note that Nomura disagrees and its Southeast Asian equity strategist based in Singapore said, “I find it difficult to justify buying Malaysia’s genuine story while ignoring the risks on valuations and also the existing risk that the Malaysian market comes with.” (He said the growth is GENUINE…. but he said that there are RISKS) He added, “The market probably goes up a bit more till the election, but what happens after it?” (I think he believes election is the reason why things are looking up. Well, I am not so sure if all these new external investors were buying into Malaysia simply because of elections. Personally, I do not think it is this year. Nope, I have zero insider information) Full article here yeah, from Bloomberg. 
At this moment, these are my wishes. May contradict one another though, haha. BNM to maintain the OPR so that no one with loan exposure gets sudden surprises. Ringgit to appreciate but very very slowly. Oil price to go down very very slowly. Oversupply of properties in the market starts getting cleared off.  We get more completion of the affordable homes. This should help stabilise the property prices further, especially for those below RM500,000 ones. Malaysians without their first homes yet get a breathing space to view, negotiate and buy a home sweet home. Externally? I hope the US economy continues to gain traction and their rates are up slowly (even if I think Mr. Trump disagrees with higher rates). China should have a soft-landing and the One Belt One Road initiative starts to change to higher gears. When these two largest economies move, I guess all of us should be okay. Too bad, I think Brexit will remain a messy issue, especially currently. May ‘lost’ seats, may lose her post too but government may remain Last but not least, ASEAN, we shall grow together okay. Cheers.
written on 30 June 2017
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