atans1

Still want to buy M’sian properties?

In India, Indonesia, Malaysia, Uncategorized on 23/11/2013 at 6:00 am

(Asean round-up)

KL property owners, an estimated 10-16 per cent of whom are foreigners, are facing sharply higher assessment payments of up to 300 per cent following the latest move by City Hall (DBKL) to boost its coffers. http://www.businesstimes.com.sg/premium/top-stories/kl-homeowners-facing-sharp-assessment-hikes-20131119

But otherwise M’sia’s looking pretty gd

— ECONOMISTS have turned more bullish on the Malaysian economy as a result of its unexpectedly strong showing in the third quarter.

They have upgraded their forecasts, and one has even dismissed the second quarter’s sharply reduced current account surplus on the balance of payments as an “abnormal”, one-off glitch.

Malaysia’s growth accelerated to 5 per cent in the third quarter, above the street’s 4.7 per cent, and sharply higher than the 4.4 per cent posted in the second quarter. The expansion was largely driven by domestic demand and a turnaround in exports.

The figures suggest that, despite criticism from rating agencies such as Fitch and an uncertain global economy, the Malaysian economy remains resilient, and continues to maintain steady economic growth.

— THE ringgit is undervalued as it has underperformed its peers since Prime Minister Najib Razak’s Budget almost a month ago, a British bank said.

In a report yesterday, Barclays Bank said the currency’s underperformance stemmed from doubts over the country’s “fiscal credibility”. But it said any such doubt should now be “diminished” after international rating agency Moody’s raised Malaysia’s sovereign outlook to “positive” from “stable” in a report released on Wednesday.

The news should boost Mr Najib’s credibility as a finance minister; he has been flayed by critics who have accused him of going on a profligate spending spree to boost the Barisan Nasional coalition’s popularity. In the run-up to the May 5 general election, government debt had ballooned to more than 54 per cent of GDP, just a whisker away from the legally mandated debt ceiling. Although the BN won, it did so with a weaker mandate.

In July, global rating agency Fitch had affirmed Malaysia’s investment-grade sovereign rating but cut its outlook to “negative” from “stable”. That raised the level and intensity of the criticism against Mr Najib.

(Excerpts from BT)

But M’sia (like Thailand) is doing less than Indonesia to prepare for tapering: Indonesia has raised short-term interest rates and India has attracted deposits from its large diaspora. Both are now accumulating foreign-exchange reserves to help prepare them for the eventual end of quantitative easing. So are South Korea and Taiwan.

Malaysia and Thailand are not taking the same precautions. Neither country has managed to recoup the reserves it lost in August. That’s a worry, considering foreigners own 28 percent of Malaysia’s sovereign bond market. Pending the implementation of a goods and services tax from 2015, the country’s public finances remain shaky. At the peak of the summer turmoil, the cost of insuring against default on Malaysian government bonds was slightly higher than for Philippines debt, which carries a lower credit rating. The gap has widened since.

Finally, debt is soaring. In Thailand, bank loans to individuals have jumped 20 percent in the first nine months of the year, higher than last year’s 18 percent growth. Meanwhile, the Thai economy has lost momentum, the politics has become unstable, and the current account has tipped into a deficit. Instead of easing, Asia’s fear of the Fed is spreading wider.

http://blogs.reuters.com/breakingviews/2013/11/21/asias-fear-of-fed-is-now-infecting-more-economies/

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