PETALING JAYA, Dec 17 — Malaysia can expect a greater inflow of foreign investment in the coming year due to improved investor perception brought on by the new government’s market transparency, according to a Bloomberg report today.
“The government will be focused on narrowing the budget deficit next year, which may crimp economic growth. On the flip side, investor perceptions the market is becoming more transparent under the new administration could lure back some foreign money,” it said in its projection of South-east Asian stocks for next year.
The business news service has forecast that Malaysia’s gross domestic product (GDP) will grow by 4.6 per cent in 2019 against 4.7 per cent this year.
It also said pointed out that AmInvestment Bank Bhd has a 2019 target for the FTSE Bursa Malaysia Index of 1,820 or 10 per cent higher than current levels.
It also cited the bank’s head of equity research, Joshua Ng, as saying that the reintroduction of fuel subsidy, the capping of the electricity tariff and the removal of the goods and services tax could lift consumer spending.
Ng had also said the sectors that should do well next year are the oil and gas, health-care and rubber gloves sectors.
Bloomberg also quoted CIMB Investment Bank Bhd head of Malaysia research, Ivy Ng, saying that she expected modest gains for stocks next year, with companies that can navigate “flattish growth” doing the best.
Overall, Bloomberg expected Southeast Asian stocks to do better next year because of an improving global macroeconomic backdrop and relatively cheap valuations.
“A likely pause in the Federal Reserve’s tightening cycle is already easing pressure on regional currencies, while lower oil prices are a boon for most markets. A continuation of those trends could suck back in some of the US$14 billion (RM58.6 billion) of foreign money that’s gushed out of Asean stocks this year,” it said.
Source: The Malay Mail Online