A Common Sense View

I keep reminding myself on what should I expect of Malaysia’s FBMKLCI in the near term. It is true that there are multiple external and domestic issues that are affecting Malaysia and its equity market. From a common sense view and a personal perspective, I sum my view as follows:

common

The above diagram sums up the primary factors that are commonly known in the market. I personally hold an overall negative view on Malaysian equities, at least for the next two years. Corporate earnings continue to decline, with no clear ‘light’ at the end of tunnel. Malaysia has too much household debt, consumer sentiment will continue to be bearish. The country relies heavily on China for its trade, and this will create further uncertainty as to the negative impacts resulting from China’s slowing economy as well as its corresponding huge debt overhang problem. Low crude oil price will continue to dampen Malaysia’s fiscal balance.

More importantly is what will be the impact resulting from the flow of ‘hot money’ from the emerging markets upon the rate hike by the US Feds. In addition, is global recession in the making?

DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES OR INSTRUMENTS MENTIONED ABOVE.

Author: Ken Utau

Markets Observer + Food Lover

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