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Has Malaysia’s fundamentals suddenly changed better?

I received a few comments when I wrote this:  Malaysia will be facing a tough situation soon, wow  So, has Malaysia’s fundamental suddenly changed within the past few days? The answer has to be a yes because the Ringgit jumped up the most within a day versus USD since 1998. Anyway, nothing has changed. It just happened that Malaysia has shown a trade surplus which has suddenly gone up because exports increased because of competitive Malaysian companies while imports went down. Oh yeah, we must also quote the rising crude oil prices. It also went up because exports have been climbing for the third straight month. I repeat, THIRD straight month. Hope you understand, negative sentiment is the key for the current undervalued Ringgit and is definitely not due to one person or one company. Yes, some even asked me if Malaysia is already in a recession. Sigh.
Exports grew to RM66.53 billion, up RM2.64 billion compared with August 2014 and this is the highest thus far for 2015. Despite China slowing down, the expansion in exports were to countries such as China, the United States, the European Union, Thailand, Singapore, Vietnam, and the Philippines. Due to this, the trade surplus has ballooned to double digits; RM10.19 billion. (Note that that particular currency which has been strengthening has had deficits for years) Another reason was also because of the finalized Trans-Pacific Partnership Agreement (TPPA) on Monday in which Malaysia was a party to. According to Credit Suisse, the two countries which may benefit most from this would be Vietnam and Malaysia.
Nomura Research said that it expects Malaysia’s economy to grow at a resilient 5% this year after looking at the strong trade data. Dear fellow Malaysians, it is really the time to read more, understand more. If you do not, at the very least don’t continue forwarding foolish news around as if you are also an economist. Ringgit’s current appreciation still does not change what the majority thinks but the current appreciation is because the fundamental is still there. In case you did not realise, one country is already facing a possible technical recession even if the currency is still rising simply because Ringgit is dropping. I do not think the current momentum can be continuous because everything would still hinge on the decision and announcements from Federal Reserve. We shall see then. For now, I smile for a good turn for Ringgit.
written on 8th Oct 2015
Next suggested article: 1998 vs 2015, just numbers, no rhetorics

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.


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