Investors shun Malaysia as emerging market outlook cools


By Yow Hong Chieh
The Malaysian Insider
January 20, 2011

KUALA LUMPUR, Jan 20 — Global investors are continuing to avoid Malaysia as fund managers trim investments in emerging markets over concerns that China’s economy will slow this year.

Bank of America Merrill Lynch said in a note this week that Malaysia remained a “big underweight” for investors in emerging markets, with its underweight rating increasing from 46 per cent in December to 55 per cent in the first month of 2011.

An underweight call is a recommendation for investors to reduce their investments in a particular security, asset class or, in this case, country.

Malaysia slipped from 14th place in December to dead last this month among the 15 countries studied by the investment bank, despite the roll out of big ticket Economic Transformation Programme (ETP) projects and speculation that snap polls will be held later this year.

Topping the list was strongly overweight Russia, followed by Thailand, Brazil, Turkey, South Korea, China, Indonesia and Mexico. Other emerging market underweights were Poland, Taiwan, Colombia, India, South Africa and Chile.

Malaysia’s underweight call also comes at a time when fewer investors are looking to increase investments in emerging markets due to worries that China’s “eroding” economy will have a knock-on effect on the market in Asia.

In its January 2011 Fund Manager Survey, Merrill Lynch said while support for emerging markets remained high, the number of investors overweight on such markets was continuing to decline.

The investment bank reported only 43 per cent of fund managers surveyed said they were overweight on emerging markets, down from 56 per cent two months ago.

The proportion of investors wanting to increase investments in emerging market equities more than any other region similarly fell from 31 per cent in December to 20 per cent.

“These lower readings come as belief in China’s economic prospects has eroded,” Merrill Lynch said in a press statement yesterday.

A Reuters poll released yesterday showed that economists expect China’s economy to expand by 9.3 per cent this year, throttling back from double-digit growth in 2010.

Inflation in China was also tipped to quicken to 4.3 per cent, a “much faster build-up” of price pressures than predicted.

“Later this year, Asian policymakers are going to have to be much more aggressive to get inflation under control and the consequence of that will be weaker growth,” Nomura Chief Economist Asia Robert Subbaraman told Reuters.

“For Asia, the challenging part is how to deal with inflation at the time when there is still capital inflows to the region. The risk in Asia is policy is either too slow to respond or the micro — or piecemeal —measures that have been introduced… are going to lose their effectiveness overtime.”

Investors have so far greeted Prime Minister Datuk Seri Najib Razak’s New Economic Model (NEM) with disinterest, owing to lack of detailed policies, timelines and the apparent rollback of ambitious Bumiputera quota reforms detailed in the first half of last year.

The bold recommendations set out in the first part of the NEM to boost competitiveness by reducing quotas appear to have been sidelined in the second part launched last month.

Observers attribute this to stiff resistance from Malay rights groups concerned that such moves will erode the community’s interests.

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Investor concern of cool-off in China has weighed on other emerging markets. — Reuters picKUALA LUMPUR, Jan 20 — Global investors are continuing to avoid Malaysia as fund managers trim investments in emerging markets over concerns that China’s economy will slow this year.

Bank of America Merrill Lynch said in a note this week that Malaysia remained a “big underweight” for investors in emerging markets, with its underweight rating increasing from 46 per cent in December to 55 per cent in the first month of 2011.

An underweight call is a recommendation for investors to reduce their investments in a particular security, asset class or, in this case, country.

Malaysia slipped from 14th place in December to dead last this month among the 15 countries studied by the investment bank, despite the roll out of big ticket Economic Transformation Programme (ETP) projects and speculation that snap polls will be held later this year.

Topping the list was strongly overweight Russia, followed by Thailand, Brazil, Turkey, South Korea, China, Indonesia and Mexico. Other emerging market underweights were Poland, Taiwan, Colombia, India, South Africa and Chile.

Malaysia’s underweight call also comes at a time when fewer investors are looking to increase investments in emerging markets due to worries that China’s “eroding” economy will have a knock-on effect on the market in Asia.

Najib’s NEM has been hampered by a scarcity of details. — file picIn its January 2011 Fund Manager Survey, Merrill Lynch said while support for emerging markets remained high, the number of investors overweight on such markets was continuing to decline.

The investment bank reported only 43 per cent of fund managers surveyed said they were overweight on emerging markets, down from 56 per cent two months ago.

The proportion of investors wanting to increase investments in emerging market equities more than any other region similarly fell from 31 per cent in December to 20 per cent.

“These lower readings come as belief in China’s economic prospects has eroded,” Merrill Lynch said in a press statement yesterday.

A Reuters poll released yesterday showed that economists expect China’s economy to expand by 9.3 per cent this year, throttling back from double-digit growth in 2010.

Inflation in China was also tipped to quicken to 4.3 per cent, a “much faster build-up” of price pressures than predicted.

“Later this year, Asian policymakers are going to have to be much more aggressive to get inflation under control and the consequence of that will be weaker growth,” Nomura Chief Economist Asia Robert Subbaraman told Reuters.

“For Asia, the challenging part is how to deal with inflation at the time when there is still capital inflows to the region. The risk in Asia is policy is either too slow to respond or the micro — or piecemeal —measures that have been introduced… are going to lose their effectiveness overtime.”

Investors have so far greeted Prime Minister Datuk Seri Najib Razak’s New Economic Model (NEM) with disinterest, owing to lack of detailed policies, timelines and the apparent rollback of ambitious Bumiputera quota reforms detailed in the first half of last year.

The bold recommendations set out in the first part of the NEM to boost competitiveness by reducing quotas appear to have been sidelined in the second part launched last month.

Observers attribute this to stiff resistance from Malay rights groups concerned that such moves will erode the community’s interests.

  1. #1 by dagen on Thursday, 20 January 2011 - 4:09 pm

    Hey umno orgy time is about to be over. 50yr is long enough. Now buzz off.

  2. #2 by johnnypok on Thursday, 20 January 2011 - 4:29 pm

    A lot of stolen moneys are kept in overseas banks. A former PM has hundreds of millions under his wife’s and children’s name, in Singapore. Can you imagine, the billions being stolen over 50 years?
    Imagine the punishment that they will get, if under hudud law.

  3. #3 by boh-liao on Thursday, 20 January 2011 - 4:39 pm

    Ai say man, dis Bank of America Merrill Lynch has not met our big fat lady PM yet
    No worry, she will charm Bank of America Merrill Lynch 2 invest big in 1M’sia

  4. #4 by Taxidriver on Thursday, 20 January 2011 - 4:40 pm

    When a country is grouped in the ”underweight” category, its leaders are usually overweight. Look at leaders in Taiwan, Japan, Korea, Singapore, Britain, US…… most of them look very fit and slender. But look at Malaysia’s government leaders…..Vast majority are overweight with bulging tummies!

    Can cintanegara please tell me why?

  5. #5 by boh-liao on Thursday, 20 January 2011 - 5:06 pm

    Looks like another state buy erection in Melaka is on d way, but must say bye2 1st

  6. #6 by waterfrontcoolie on Thursday, 20 January 2011 - 5:31 pm

    Let me guess. Eating too much sweets or sugar laced goods. Maybe cintanegara is slim so long that he sticks to rambutans.

  7. #7 by yhsiew on Thursday, 20 January 2011 - 6:00 pm

    ///The bold recommendations set out in the first part of the NEM to boost competitiveness by reducing quotas appear to have been sidelined in the second part launched last month.

    Observers attribute this to stiff resistance from Malay rights groups concerned that such moves will erode the community’s interests.///

    Najib has done great damage to the national economy by letting extremist groups dictate the future of the country.

  8. #8 by yhsiew on Thursday, 20 January 2011 - 6:33 pm

    ///Investors have so far greeted Prime Minister Datuk Seri Najib Razak’s New Economic Model (NEM) with disinterest, owing to lack of detailed policies, timelines and the apparent rollback of ambitious Bumiputera quota reforms detailed in the first half of last year.///

    With investors losing confidence in the NEM and prices surging against a backdrop of stagnant salaries, the country is in for a rough ride!

  9. #9 by negarawan on Thursday, 20 January 2011 - 6:39 pm

    The Malay rights groups are non other than UMNO itself and UMNO-sponsored groups like Perkasa. Right from the beginning, the intent of NEM was never to change the Malay quota, in fact to increase it. A vote for UMNO is a vote for “ketuanan melayu” and further marginalization of non-bumis.

  10. #10 by sotong on Thursday, 20 January 2011 - 6:40 pm

    You need to lay a proper foundation decades ago. Other countries had done that with unpopular policies and accepted the pain.

    With continuous bad news……this is not good.

  11. #11 by Godfather on Thursday, 20 January 2011 - 9:44 pm

    Foreign investment is drying up, but do not worry. We have many magicians in Najib’s cabinet well trained in hoodwinking the rakyat such as Idris Jala.

    Remember the recent RM 10 billion deal to build police quarters all over the country given to a company owned by Khazanah ? As the deal is on a deferred payment basis, this company’s debts will not be reflected in the national debt. So let’s go create special purpose companies owned by GLCs and have these companies incur RM 67 billion of debt which will be paid back by the government on a deferred basis, and this RM 67 billion won’t be part of the national debt as it is not borrowed directly by the gomen.

    They keep fooling themselves, and maybe even the rating agencies may be fooled, but they can’t fool us all.

    And of course, the construction contracts for these ETPs of 67 billion will not be done by open tender and will be given via direct negotiation to cronies.

    Najib and his band of thieves are [email protected] us royally, and most of the people still don’t realise it..

  12. #12 by tak tahan on Thursday, 20 January 2011 - 10:24 pm

    I think foreigner investors are extremely afraid of perkosa, assuming them like a bunch of tokoh tokoh pahlawan in the olden days century,macc dogs and our famous shooting like cowboy stlye thugs the pdrm.How to attract investors with all these buffoons roaming around our street like their father’s owned property.

  13. #13 by negarawan on Thursday, 20 January 2011 - 10:32 pm

    Who would want to invest in a country with lazy and incompetent UMNO MPs like Badrul Hisham who sits at home six months in a row doing nothing, and not taking care of the interests of his constituents?

  14. #14 by HJ Angus on Thursday, 20 January 2011 - 11:31 pm

    We are really in serious trouble.
    The massive brain drain combined with the vast sums being sent overseas confirms that Malaysia cannot attract investors.
    Soon we will have to raise chickens and grow our own vegetables to survive.

  15. #15 by tak tahan on Thursday, 20 January 2011 - 11:39 pm

    Who wants to invest here..ai yo..with so many rambutans and buffoons to work with.Really mental torture man.That time,Hj Angus,no money to buy chicken or feeds,either one.I am trying to cut my diet in case i can survive during those critical time.Unless PR take over i will not be spendthrift.

  16. #16 by Taxidriver on Thursday, 20 January 2011 - 11:51 pm

    Investors are smart people. They can see that Malaysia is going bankrupt under UMNOB/BN government which tolerates corruption, murders, rapes and encourages extremism. Parking their money here is not safe, they have more confidence in the little Red Dot government which has wise old Lau Lee whereas in Malaysia a senile racist mamak is calling the shot. The PM is just a boneka (puppet)

    To Najib, I offer this advice: ” Sian sia sou wei chiang” ( a Chinese saying literally translated: to strike first to gain the upper hand; a preemptive strike) Your more deadly enemy is not Anwar but Mahathir!

  17. #17 by tak tahan on Friday, 21 January 2011 - 12:56 am

    To Najib, I offer this advice: ” kuan eh tiau lu eh boh seng” ( a Chinese saying literally translated: to shut her up and chain your Loh Si Ma in the house to gain the upper hand; a go go a preemptive strike) Your more deadly enemy is not Anwar but Loh Si Ma who loysee(fat mice smelling you all over) ie your wallet or pocket,perfume left over on ur shirt from ur jolly happy hour party time.If it is not smell well to her favorite perfume brand she will taroh u and tembak tembak like peluru from her sweet mouth.Jaga jaga man!!

  18. #18 by monsterball on Friday, 21 January 2011 - 3:39 am

    So many signs and results….showing Malaysia government cannot be trusted.
    Useless to talk more.
    Talk with your votes at 13th GE is best.
    And it will be interesting to watch how Malacca folks vote in the first by-election before the 13th GE.
    Malaysia is being developed by UMNO B government…..especially Malacca,…but they keep ignoring the huge overpriced close tenders for each jobs….that actually cheat all tax payers…EPF members.. and worst of all…oil profits belong to the rich and poor…all taken up by the rouges and thieves.
    Foreigners and investors are no fools.

  19. #19 by tak tahan on Friday, 21 January 2011 - 4:05 am

    You and i are swimming in the deep blue sea with school of sharks around us but you and i know how to differentiate them by the good one on their looks,the hearsay demeanor of the one you see the most not friendly and full of ketuanan attitude..Soon this frightening feel factor willl be solved by PR and our land will be filled with glory man and dolphins to make our happy live happy forever. No Worry La!Kia ha mi!Kae kechan ho i lang sut liau ki ah.Ai ya…

  20. #20 by Ray on Friday, 21 January 2011 - 5:15 am

    Mainly due to Umno corruption obssession which then undermines rules of law,judiciary system,Malaysia as a nation still deeply entrenched under undemocratic policies regulation.,thereby causing every rakyat
    Malysian suffers as the results of Party Umno corruption aspiration.
    Unless Pakatan voted oriegn Investment will spontaneously flow into Malaysia once again revitalises the current Umno bed ridden economy…
    cheers>>>>

    “”Yam seng and lou hei yee sang””

  21. #21 by undertaker888 on Friday, 21 January 2011 - 7:50 am

    the investors did not shun Malaysia. They shunned umno and it’s 40 thieves. these katak di bawah tempurung think that the world also owe them 30% and crutches . the investors will tell them go fly kite.

  22. #22 by undertaker888 on Friday, 21 January 2011 - 7:53 am

    …..the investors did not shun Malaysia. They shunned umno and it’s 40 thieves. these katak di bawah tempurung think that the world also owe them 30% and crutches . the investors will tell them go fly kite.

  23. #23 by dagen on Friday, 21 January 2011 - 9:39 am

    Hmmm … Hv I missed something? I thought I read something in the chinese paper (oriental) which says that malaysia is ranked 5 (in a study by a certain american group) in the world for outflow of illegal money. Something like 100b ringgit flowed out of the country every year since 2000. Is that real? Sheeet, if it is. And tell you wot. I think it is true and I believe a large part of it was umno’s doing. BTW cintanegara u pun ada bank account kat perancis?

    Economy is definitely bad despite jib’s public orgy. And if expert’s prediction is correct, i.e. the overheating chinese economic bubble is about to burst, all of us in the country are surely doomed. Umnoputras will be alright. They have villas outside the country and money enough to last them several generations. Even cintanegara has rambutans and he is not sharing them with the rest of us!

  24. #24 by tak tahan on Friday, 21 January 2011 - 11:15 am

  25. #25 by ablastine on Friday, 21 January 2011 - 12:30 pm

    Don’t talk about foreign investors, ordinary people like myself and friends have started selling Malaysian properties and holdings long time ago and now we have very little left in the country. We can see that the UMNO government is robbing everybody poor so that they become obscenly rich. Petronas is their ATM machine and every profit generating organisation which it comes under them becomes loss generating. Every grandeur scheme fails, the bigger they are the bigger will be the failure. This is because these schemes are from the beginning conceptualised to help UMNO cronies earn big bucks from the countries treasury. Those who are capable are deemed anti-government because they can see what damages have been wrecked by the BN government. Those who are down right racist, useless, lazy and clueless of what is happening in the world get to dictate policies that ensure propagation of more useless scoundrels. Talents leave in droves and capital with them.

    Still the people vote for them – look at Tenang. Is there really hope? There are simply too many ignorant and stupid people in the country to defeat BN through the ballot. The country is dying and it should pretty well be a failed state or bankrupt by 2019 as predicted. Malaysia should be exporting maids, prostitutes and manual labourers by then. The currency should be devalued futher by then with the Yuan double or triple its value.

  26. #26 by baochingtian on Friday, 21 January 2011 - 12:44 pm

    If such info was known earlier, do we need local expert DS I/Jala to tell the people the country will soon be bankrupt? So the rakyat are subjected to homocide ? no? or is it suicide ? The people are being tax here and there, subsidy cut, RM50 tax on credit card and we’ve billions well put in the very safe personal overseas safe by some prominent malaysian figures? Do we have future under such management team? Does the national KPI mean anything at all?

  27. #27 by Bigjoe on Friday, 21 January 2011 - 2:40 pm

    Croni-conomics – that is the term that describe BN economic policy.

  28. #28 by tak tahan on Friday, 21 January 2011 - 4:36 pm

    But Madam Clinton,please reserve you comment on this and as well as other important matters.The reason is we,netizens do not have a pinch of confident in you anymore.Moreover you farted in the public and it’s not polite and acceptable here.Thank you for your consideration.Lastly,you also need to jaga jaga your En Clinton as from judging his past moral as i will like to give my two cents worth out of concern.God bless you and America.We malaysian can be able to make our dream come true also if we are not blinded by falsified information.

  29. #29 by dagen on Friday, 21 January 2011 - 6:07 pm

    What exactly did sec of state mrs clinton say? Oh that is not the first thing you want to know. Who reported what she said is more important. And must be determined first. If it was our local umno (or even mca) papers then you may bet your last sperm that she has been misquoted or quoted out of context. Or worse, her words have been twisted to portray a totally different meaning.

    That is so umno. Never forget them – their low down ways.

  30. #30 by AskChong on Tuesday, 25 January 2011 - 1:22 am

    Hope? No hope?

  31. #31 by tak tahan on Tuesday, 25 January 2011 - 1:46 am

    Mdm Clinton:Asking me?You can smell from the odour i just let go.Hard to tell desu ne?Complicated to explain boys.

  32. #32 by Bokep jepang on Thursday, 5 October 2017 - 3:23 pm

    If such info was known earlier, do we need local expert DS I/Jala to tell the people the country will soon be bankrupt? So the rakyat are subjected to homocide ? no? or is it suicide ? The people are being tax here and there, subsidy cut, RM50 tax on credit card and we’ve billions well put in the very safe personal overseas safe by some prominent malaysian figures? Do we have future under such management team? Does the national KPI mean anything at all?

    Download video bokep

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