ASEAN KEY DESTINATIONS
International investors favor status quo in power in Malaysia
There would be “some risk” if the Opposition were to take over the government, JP Morgan Securities (M) Sdn Bhd executive director of equity research Mak Hoy Kit opined yesterday.
He said the Barisan's Economic Transformation Programme (ETP), government infrastructure programmes and rail-related projects would kick off if the political status quo remains.
“We are now Neutral' on Malaysia because of the general election overhang. Investors will be worried if the Opposition wins. When there is uncertainty, investors typically act negatively,” he said.
JP Morgan is also positive on the construction sector, and sees this as a domestic growth opportunity with some 160 billion ringgit (US$52.38 billion) worth of rail projects up for grabs next year.
On the oil and gas sector, with Petronas committing to some 300 billion ringgit capital expenditure over the next five years, Mak is expecting to see more contract wins and an increase in earnings of the local oil and gas players.
Mak sees the ETP creating some 452,066 jobs by 2020, per capita income growing to $15,000 (45,000 ringgit) from $6,700 (20,000 ringgit) in 2009.
It was recently reported that Eastspring Investments Bhd Chief Investment Officer (Equities) Yvonne Tan Hong Yean cautioned that foreign funds might opt to stay out of Malaysia if there was a change in government. *US$1=3.05 ringgit
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