Bloomberg said recently that Malaysian assets are back in favour of foreign investors, adding that this was because of signs of an economic turnaround instead of a scandal that has touched the top of government and as far as Hollywood.
It also said this ‘stark shift’ may be the reason why PM Najib Razak may call for early polls to cement his hold on power.
Months ago, Bloomberg said the ringgit was dirt cheap and that was a reason why investors should look into going back to Malaysia.
At the current rate, though the ringgit is seen as the strongest major Asian currency this quarter climbing twice as the next best that is the Chinese yuan, it is obvious why global funds have bought the most Malaysian stocks year to date since the same period in 2013, and net inflows to the bond market surged in April and May.
By global, Bloomberg means they are from China and the USA.
That is not surprising again, since China is doing everything it can to beef up the Najib regime ahead of a major decision making for the US$40 billion High Speed Rail project.
As for the American investors, they are always ready to play around the markets where the currency is dirt cheap.
Najib has indeed weathered political attacks and protests since the 1MDB scandal broke out, but that is mainly due to the tight control the ruling political party has on the situation, said an observer to The Independent.
Most powerful PM
“It is also because he is so powerful – perhaps the most powerful Umno leader ever – that has made it impossible for his foes to bring him down.
“And that has contributed to the ringgit being weaker than ever (weakest over the last decade) and it has forced investors to look at the macro-economics rather than the political risks,” said the observer.