Malaysia’s economy heading upwards, say market watchers

malaysia-economy-ringgitKUALA LUMPUR: Despite what doomsayers say about Malaysia’s economic situation, things are brightening up, according to a CNBC report.

More foreign investment is flowing in and the ringgit has strengthened. Even the International Monetary Fund, on Monday, upgraded its growth forecast for the country from 4.5% to 4.8%.

The report noted that the ringgit was one of the best-performing currencies in the region this year and that domestic stocks had gained around 8%.

“After three years of pretty dismal performance coinciding also with the weak ringgit… there has been a marked turnaround, slight strengthening in the ringgit recently and the market looks a bit better,” CNBC quoted Gerald Ambrose, the chief executive of Aberdeen Asset Management Malaysia, as saying.

CNBC spoke to several people at the sidelines of the recent Invest Malaysia 2017 conference.

Ambrose said a larger proportion of companies listed on Bursa Malaysia had beaten earnings expectations in the first quarter this year, describing this as a “sea change” from the last two years.

Zafrul Aziz, group CEO of CIMB, was quoted as saying that about RM10 billion had flowed into the country’s equities market in the first six months of this year.

“We’re confident that we’ll see more (fund inflows) based on the pipeline.

“In the capital market this year in Malaysia, we’re looking at fundraising in excess of RM100 billion. Last year, it was less than RM100 (billion), so definitely we believe there will be funds coming in,” he said.

CNBC noted that market watchers such as S&P Global Ratings had warned that the next general election could add to risks.

However, Chong Yoon Chou, head of Asian equities at Natixis Asset Management Asia, felt greater volatility in the Malaysian market presented an opportunity to buy into the expected growth trajectory of the country.

He expressed confidence that global investments, including from China, would benefit the construction, infrastructure and finance sectors.