Malaysia by Moody’s, Standard & Poors Global and Fitch. Enough lah.

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There has been occasions when Malaysian friends overseas asked me this question. “Is the Malaysian economy okay?” Actually, the actual sentence was a far more negative one but let’s leave it at that. If they are close friends, I would usually give them a typical half and hour of my time and answer their questions one by one. I have to tell them that I still have a job, staying in a huge and well maintained condominium (could not afford a landed), 2 PROTON cars (may change one car next year) and supporting one wife who’s a full-time housewife as well as two kids. Oh yeah, I would also share with them that my last 3 jobs did not require me to apply for them. (Fortunately, my skills and experience are still sought after.) This is especially important because these close friends are working in foreign countries and seem to be happy there. I have to tell them that just like them, I am also happily working in Malaysia too. Malaysia will always be my Negaraku. Well, if they are not close friends, I would advise them to read official news instead. Haha. Maximum time spent to reply them personally? 30 seconds. There are three official ones below. They are extremely well known international rating organisations.

Moody’s  Moody’s say that the debt burdens of Malaysia is still higher than other A-rated peers. Moody’s says that Malaysia’s reserves are insufficient to meet maturing external long-term debt repayments and short-term debt. However this is moderated by a sizeable net asset position, large export proceeds, and deep domestic capital markets. It says Malaysia’s STRONG growth trends will continue because of the country’s highly diversified and competitive economic structure underpin stable and relatively robust growth trends that have proven to be resilient to external headwinds. At a growth of around 5 percent, this is SIGNIFICANTLY higher than most other A-rated peers. With regards to the household debt which is currently at 84.6% of GDP at the end of September 2017, it does not pose material threats to financial stability. The reason for this is because households have large liquid financial assets to buffer the impact of a potential shock to debt servicing capacity. Moreover, ongoing macroprudential measures will help contain potential further increases in debt.(Depending on which way you would like to see it, it can be both. Negative or Positive, up to you lah. I think from the whole article, it’s conclusively more positive than negative. Else, why are we in the same group as the A-rated sovereigns….)  Here’s that article again. 

S&P Standard & Poors (S&P) says that Malaysia’s rating will be stable for the next one or two years. It is however concerned about the build-up in government guarantees. S&P Global Ratings affirmed Malaysia ‘A-‘ a few months ago. S&P chief economist Paul Gruenwald said “We have not heard much of Tiger Economies in recent years but Korea, Taiwan, Singapore, Malaysia and Thailand have been experiencing robust real electrical and electronics (E&E) exports, lifting growth in all these economies.” (Positive statements indeed I believe?) Here’s that article in NST again. 

Fitch Ratings Fitch Ratings has affirmed Malaysia’s long-term foreign- and local-currency issuer default ratings at ‘A-’ with a stable outlook. It says that Malaysia’s ‘A-’ rating is supported by strong gross domestic product (GDP) growth compared with the median of ‘A’ category peers, sustained current account surpluses and the country’s net external creditor position. Do read the full article in TheEdge here. 

Well, concerns for the Malaysian economy are definitely there. Just have to hope that the economy keeps strengthening just like ringgit’s recovery in 2017. Without by far more positive news than negative news, sentiment is not likely to improve a lot and well, the property market will continue to be lacklustre. To all my close friends, we should enjoy lattes occasionally. Pessimism does not help much actually. Changes must keep happening and this is what Robin Sharma said, “Change is hard at first, messy in the middle and gorgeous at the end.” In any economy, in any country, there are successful people looking at opportunities. All the best.

written on 19 Dec 2017

Next suggested article:  Bad news? China’s credit rating cut because of ‘slowdown’ in economy



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