On 22 January 2016, Ringgit rallied the most within 8 weeks. Actually, up till end of 2015, ringgit was on an uptrend but everything fell apart by week 1 of January 2016 beginning with China. To those who have been following kopiandproperty.com for a while, you would note that I disagree with the current value of ringgit. It’s simply too undervalued. This is especially so when we benchmark all the usual numbers with that appreciating currency Why is their stock market at such a high level while here in Asia, every bourse look bad. Yes, I am talking about the usual external debts, foreign reserves, economic growth, banking sector health, unemployment rate, actual GDP growth thus far and even the stock market’s current price versus stock price value. Sorry, even our Bank Negara Malaysia lady is definitely better than their Fed Reserve lady who still have to show more courage in her decisions. Enough of my personal opinions. I am still a nobody.
Let’s hear what UBS Group AG, the world’s largest private bank is saying just end of December 2015. It’s telling clients that “little room for further dollar appreciation.” This is after the growth for the past 3 years. Stamford Management Pte’s CEO Jason Wang which oversees $250 million for Asia’s rich will review its outlook for greenback gains after Q1 2016. The same Bloomberg article also revealed that in the 4th quarter of 2015, the Indonesian rupiah is up 7.3 percent, the Malaysian ringgit 2.5 percent and the Singapore dollar 0.9 percent. Next commentary by Russ Koesterich, chief investment strategist at BlackRock Inc., the world’s biggest asset manager is interesting. He shared that long-term investors willing to withstand short-term volatility should consider Asian emerging stocks and bonds because prices are attractive.
I still personally think currencies are very volatile and would not want to speculate which will be up or down etc. If we believe Ringgit is going to go down further and believes Singaporean Dollar is safer and more stable, then instead of hedging by buying the Singaporean dollar, one may want to consider buying stocks (shares) in some undervalued Singaporean listed companies instead. This is still considered a hedge somewhat but not on currency vs currency basis. Do note that volatility is very high for currencies but for companies doing well, even if the share price takes a beating, you would still expect dividends. Warren Buffet said, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” Happy believing and taking actions.
written on 23 Jan 2016
next suggested article: Shares are long term, not for speculation. My 2 cents