Is Malaysia worth to invest in? If not, where else?
MCO struck again. As known, Malaysia economy will be impacted again due to restricted movement. It is again coupled with political unstableness. The future prospect of Malaysian investment remains unknown. Unless highly targeted investments in selected sectors or companies, Malaysia remains unattractive comparing to other countries.
According to Ifast Capital: “Fitch Ratings has downgraded Malaysia’s long-term foreign-currency issuer default rating (IDR) to ‘BBB+’ from ‘A-‘, with a stable outlook where the downgrade marks the ratings agency’s first for the country since the 1997/98 Asian Financial Crisis. The downgrade came as the rating agency opines that Malaysia’s key credit metrics have been impaired by the economic fallout from COVID-19 and has added to the country’s fiscal burden. While Malaysia’s economy is expected to rebound by 6.7% in 2021, lingering political uncertainties have added to the downside risk of the outlook. On fiscal deficit, Fitch expects it to remain higher than pre-pandemic levels, given a continuation of support measures and political pressure for higher spending. It also pointed out that uncertainty about the continued inclusion of Malaysia in a key bond index remains, and exclusion in 2021 could potentially generate capital outflows.”
If not Malaysia, where else?
- China – China had its export rose last year to their highest level on record, positioning as the only major world economy to grow during the pandemic year. Chinese exports rose 3.6% from a year earlier according to data from China General Administration of Customs. Chinese factories are resuming on production after the lockdown. Chinese Yuan has strengthened against USD over the course of 2020.
- Asia Pacific and emerging market – There are many countries such as South Korea, Indonesia, Philippines and Hong Kong are worth investing. These countries are having much more stable government than Malaysia. The post pandemic recovery should benefit the countries compared to developed countries. The loose US monetary policies will weaken US dollar which will increase additional investments in the emerging market and make cheaper borrowing for USD denominated debts.
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