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Both of our ex & current Prime Minister already voiced their views regarding this matter. Yesterday, our ex-PM said Government should SELL MAS if it can be run more effectively by private sector. Meanwhile, when asked, our current PM said there was no plan to privatize MAS now because it was on track to its turn around plan under the helm of new management. So? In fact, this was like a million ringgit question for many speculative investors. Maybe, they or YOU were hoping for the deal to materialize if you bought the shares just recently. Anyway, it won't be as easy as you might think. MAS is a national carrier . It carries the national flag wherever it goes. (Some more, national day is approaching now) How much to privatized? Especially for a still loss-making company... Definitely, Government won't get much if MAS being privatized now. However, everything is possible given the facts below: National company is just a company anyway. We have just witnessed the privatizati...

Are you bored of the recent elections hoo-haa ? It's all coming from either party from different side, some NGOs, and some political related persons. How about foreigners? What are they thinking about our Malaysia General Election? Here you go... In this note, Morgan Stanley outline the 5 things they think investors need to know regarding Malaysia elections: What's upcoming? Setting the context The 13th General Elections are due to be held very soon in Malayia. Parliament needs to be dissolved no later than April 2013, and elections need to be held no later than 60 days from date of its dissolution. Which are the key states to monitor? They are Kedah, Penang, Selangor, Perak, Johor, Sabah and Sarawak. Election scenarios and macro implications BN Parliamentary seat share of > 63% would be seen as a positive surprise for investors. BN Parliamentary seat share of < mid 50% would be seen as a negative risk event by investors and could have implications for leadership and gove...

By TA Securities, We believe 1H13 will be a choppy period and election concerns could drag down the FBM KLCI by 8% to 10% in the period before market rebounds in the 2H13. The impetus for revival will mainly hinge on the end of election overhang and strong domestic demand. Sustained monetary easing on the back of low inflationary pressure and attempts to reduce budget deficits by cutting subsidies and channeling the savings to productive ventures are positive despite the short-term impact on earnings. Overall, domestic economy will play an integral role in sustaining confidence in domestic equities next year in the absence of any overwhelming micro drivers. Corporate earnings for 9M12 were less robust and we forecast full year earnings growth for the FBM KLCI to be 9.4% only. Chances of a strong revival in the immediate-term are minimal based on external sentiment and dwindling demand in key export markets. Our earnings growth forecast of 8% and 8.4% for CY13 and CY14 is not compelling...

RHB research institute (RHBRI) is of the view that it could still be a choppy few months for the equity market in the 4Q given weakening economic fundamentals in the major world economies and fears of an imminent general election on the home front. Whilst more rounds of quantitative easing have been unveiled in the developed world, the big question in investors’ minds is how all these quantitative easing measures will translate to better global economic outlook. Having said that, equity still stands up vis-a-vis the unappealing returns of the alternative asset classes, such as cash and bonds and any good news is still likely to prompt a rally in equities. How was Malaysia fared? And, what's the strategy now? Thus far, Malaysia has fared relatively well in the global financial crisis, and this is partly on account of low reliance on foreign funding of its banking system and more importantly, the progress in the implementation of the Econ...

Hmmm... Yup, the title is correct. We at Finance Malaysia blog would like to hear the views from Foreign analysts only this time. Why? Because they tend to be more independent (we think), and we know that readers like you can easily access to local research reports. So, we made the decision to only show you what is written by foreign analysts as below: Phillip Capital Management : An earnest & all-around Budget? "People’s livelihood, affordable housing and tax issues topped the pre-budget wish lists. Weeks before the announcement, there were many discussions about the Budget 2013 in the media and various conjectures about the budget outcome. Everybody in town was anxiously waiting for the Prime Minister’s speech to reveal the Budget 2013, hoping the wish in one’s heart and mind will come true. TV camera shots have shown that people have been in high spirits cheering for the Santa Claus during the speech. We think Barisan Nasional has successfully drawn up the budget ...

General election is around the corner. External environment was not so promising, following the no ending of European debt crisis, world economic slowdown, and recent tension between China and Japan. I believe all of these would be some key factors being taking into consideration to formulate the Malaysia Budget 2013. Goodies? Bonus? Cash handout? Themed as " Prospering The Nation, Enhancing Well-Being of the Rakyat: A Promise Fulfilled ". Our prime minister, who is also Finance Minister, tabled the 2013 Budget at Dewan Rakyat yesterday. Over here, Finance Malaysia blog would only touches on some key points: Economic growth projected to expand between 4.5% - 5.5% Federal Government's revenue in 2013 is estimated to increase to RM208.6 billion Continuation of BR1M of RM500 to households earning not more than RM3,000 a month and also extended the aid to cover a payment of RM250 for single unmarried individuals aged 21 and above, earnings not more than RM2,000 a month RM 1...

Addressing the issue, which Finance Malaysia thinks was critical at a time of globalization heats up, Malaysia needs to formulate and take action immediately without much hesitation. But, before we jump into action, we need to know the root of the problem. Right? Exactly, we must find out the reason why we left behind other countries in terms of GDP per capita , which refers to the country's gross domestic products at purchasing power parity (PPP) per capita. According to Wikipedia, it was the value of all final goods and services produced within a country in a given year divided by the average population for the same year. Why not using nominal GDP to measure national wealth? Comparison of national wealth are also frequently made on the basis of nominal GDP, which does not reflect differences in the cost of living. Using a PPP basis is arguably more useful when comparing generalized differences in living standards on the whole between nations because PPP takes into account the re...

Continue from previous post on "New Minimum Wage Policy", here we analyze the impact from an economics perspective. Many people said the new policy will jack-up the inflation figures due to higher production costs. Subsequently, it will dampen the GDP growth numbers. Is it true? The impact on inflation and GDP growth is ambiguous . Setting a minimum wage would boost wages and consumption for workers who remain employed (likely to be the more productive workers, working in companies that have higher profit margin), but would hurt the profitability of businesses that are labor intensive and could potentially lead to higher unemployment rate . The impact on growth will likely be a net negative in the short-run as it might result in raised cost without an increase in productivity. In the long-run, this policy may bring about a positive impact if it succeeds in encouraging workers to upgrade their skills or for companies to invest more capital to...

Malaysia Prime Minister promised that there will be an important announcement on 1 May 2012 ( Labor Day ). Without much thought, it's very obvious that it was closely related to " Minimum Wage Policy " which already echoed by Government to win the heart of public. However, it receives much objections from private sectors, especially small-and-medium enterprises (SME) claiming that the new policy would impact on their balance sheets drastically. Really? Impact of a minimum wage policy As pressure mounts on the government to ensure that private sector workers in Malaysia earn salaries above the poverty level of RM760, Malaysia could set the minimum wage at RM900 for Peninsular Malaysia and RM800 for East Malaysia. According to World Bank, Malaysia's wages have risen by a CAGR of 2.6% over the past 10 years, while inflation has risen at a higher pace of 3.0-3.5%. Source: Department of Statistics, Malaysia Who is the BIG winner? The new policy would benefit some 3.2mill...

The global economy grew at a more moderate pace in 2011 after the strong rebound in 2010. The growth momentum was weighed down by continued structural weaknesses and fiscal issues in the advanced economies, geopolitical developments in the Middle East and North Africa region and the disruptive impact of natural disasters on global manufacturing production. These developments reverberated onto international financial markets and contributed to heightened market volatility throughout the year. Despite the less favourable external environment, emerging economies continued to record firm domestic-driven economic growth. At the same time, emerging economies faced increasing challenges from volatile capital flows and rising inflationary pressures. Amidst this environment, the Malaysian economy continued to grow steadily underpinned by the expansion in domestic activity and firm regional demand. The Malaysian Economy in 2011 The Malaysian economy recorded a steady pace of growth of 5.1% in ...

After looking into all those research reports on 2012 market outlook by local securities or research houses, it's time for foreign research houses. In this series of 2012 outlook, we kick start with Credit Suisse 's report, in which a section of it was written specifically on Malaysia. And, below is the excerpt from it. Malaysia’s GDP growth to outperform its regional peers'? Real GDP growth expanded 5.8% yoy in Q3, led by strong private consumption (7.4% yoy) and fixed investment (6.1% yoy), and a surge in government consumption (21.8% yoy). On a seasonally adjusted basis, we estimate that GDP expanded 4.6% qoq annualized in Q3, stronger than that of Korea, Thailand, Singapore, the  Philippines, Hong Kong, and Taiwan. Malaysia remains highly exposed to a sharp slowdown in the developed world, but, on a relative basis, we think its domestic demand will hold up better than that of the other small open economies in the region. We expect private consumpt...

The Public Islamic Savings Fund (PISVF) is  an Islamic equity fund that seeks to provide income over the medium to long-term period by investing in a diversified portfolio of primarily Shariah-compliant Malaysian stocks which offer or have the potential to offer attractive dividend yields . PISVF may also invest in Shariah-compliant growth or recovery stocks that have the potential to eventually adopt a dividend payout policy. As the Fund focuses its investments mainly in the domestic market, PISVF offers investors an opportunity to capitalise on Malaysia’s resilient economic growth prospects in the medium to long-term. The performance of selected Shariah-compliant sectors of the Malaysian economy is expected to remain supported by sustained consumer and investment spending over the longer term. To achieve increased diversification, the Fund may also invest up to 30% of its net asset value (NAV) in selected foreign markets which i...

Well, well, well... The newly announced Budget 2012 seems to be a very holistic one, which covers almost everyone (even the opposition MPs). In the budget, a total of RM232.8 billions was allocated to implement all Government development plans, which include the projects and programs under various plans, focusing on the well-being of the rakyat . But, there are a few interesting questions that Finance Malaysia would like to highlight here. 1) Is it too optimistic? As we all know, the external environment is becoming more challenging once again due to slowdown in US, Europe and Japan (if not double-dip recession). This would definitely impact Malaysia as manufacturing sector still playing a crucial role in our country's growth. While IMF is revising downward the global growth next year, our Government is projecting a 5 - 5.5% growth this year, and 5 - 6% for 2012. I think we should be very happy if Malaysia can grow more than 4.5% for 2011 and 2012. 2) Budget Deficit to come down...