Important notice where money and loans are concerned. Article in thestar.com.my here. Nomura Research warned in its recent 2019 outlook report, that a number of countries in Asia including South Korea, Greater China, Singapore, Thailand and Malaysia may be experiencing a sudden shortage in the availability of money for lending, leading to a decline in loans available. Enough of bad news? Well, this is Nomura Research’s next sentence. This credit crunch is likely to be “the third and final wave of a bear market in Asia”. It says also that the region’s economy will recover after July 2019. (Ready to hold on for 6 months in 2019?)
Nomura said, “We expect the third wave to be a credit crunch that starts in 1Q19, as an accelerated Asian growth slowdown interacts with property market corrections.” (property market corrections usually refer to a falling property prices and will usually for properties which are already overvalued today)
However, in the second half of 2019 and into 2020, we forecast an economic recovery and, like the phoenix rising from the ashes, we believe it will be Asia’s time to shine. (wow… phoenix rising from the ashes… this is an Asian perspective and I am glad to be part of them too)
Investors will refocus their attention on Asia’s enormous growth potential vis-a-vis the rest of the world, activating a risk-on market rally as early as 2Q19. (Let’s just agree that ASIA will now be the focus moving forward. It used to be some other regions and many advanced economies of today. However, investors who does not want to miss out should all be here already.) Full article from thestar.com.my here.
I think if the credit crunch is to happen, then our Bank Negara will respond to it swiftly. Perhaps an even earlier reduction in the rates may be coming too. As for investors I think this research tells us once again that statistically, it’s not all pretty but a property bubble or even a financial crisis is unlikely to start from Malaysia. Count our blessings. With all the controls in place, we will not suffer from a sub-prime crisis due to insufficient intervention from the authorities when speculation and greed ruled the market. Oh yeah, July 2019 is just 7 months away. Let’s ride it out together.
written on 12 Dec 2018
Next suggested article: Unsustainable spending will bring the next financial crisis.