Property market and affordability

 

Affordability goes hand in hand with income.

Affordability goes hand in hand with income.

THE older wisdom believes that a market cycle typically lasts about 10 years. While this is not set in stone and social media has somewhat disrupted this timeframe, one sector that seems to have moved in tandem with this timeline is the property sector.

The Malaysian property market has been on a downtrend for close to a decade. Take the KL Property Index (KLPRP). It has not revisited its peak in 2024. From a high of 1,524 on Aug 18, 2014, it fell to a low of 495 on March 23, 2020, during the Covid-19 lockdowns.

However, this past year, the KLPRP has performed extraordinarily, rebounding to 1,132 as at July 31, 2024, delivering a yearto-date return of 31%.

Is this the sign that our property market is truly on the path to recovery? It the worst over for the sector which has been in the doldrums for over a decade?

The peak of the property market was marked with the rollout of the popular “Developer Interest Bearing Scheme”.

This scheme essentially allows purchasers of property to pay only the initial deposit, with the developer absorbing the interest throughout the construction period until vacant possession.

This eased the entry for many first-time homebuyers who were previously deterred by deposit and interest repayment obligations.

However, as the market overheated, the government abolished the scheme. Nonetheless, various modified schemes continue to exist in the market.

We started witnessing many businesses diversified into property development.

Firefighting equipment manufacturers, confectionery makers and even textile companies entered the sector and became property developers overnight.

This led to a surge in the supply of properties. We must remember, in the past, properties were built sideways.

With advancements in technology and new regulations such as higher plot ratios, properties started being built upwards, unlocking a significant number of units and pushing up land costs.

There was also the mushrooming of “property gurus” who conducted seminars on property investment, which spurred speculations further.

The worst were those that propagate “compressed loans”, where buyers exploited a loophole in the banking system by submitting multiple loan applications at the same time to various banks for several properties.

This allowed them to borrow loans for several properties as the system then was not able to catch these simultaneous submissions.

All was well and good when the market was hot, as buyers could do a quick flip.

But when the market turned, many of these buyers could neither find buyers nor rent out the properties. Without the financial ability to service multiple loans at the same time, their properties were auctioned by the banks.

This led to a huge number of property units being put on the auction market. The situation was further exacerbated when the pandemic hit, causing many people to lose their income.

At one point, there were more than 200 listed companies on Bursa Malaysia involved in property development. As the supply of unsold units far outpaced demand, there was a compression in margins and write downs for many listed developers.

Sales were affected and many projects which were launched could barely achieve 50% of the sales threshold.

The situation was further complicated by delayed project completions, leading to liquidated ascertained damages (LAD) claims piling up.

The verdict of Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar [2020] 1 MLJ 281 led to many homebuyers filing suits against property developers, with the estimated claims reaching Rm48mil due to the extension of time (EOT) granted between 2016 and 2020.

The property market was indeed plagued with many challenges to a point where a veteran industry leader publicly commented that “the golden age of property sector is gone”.

As with all cycles, there is always a turning point. It seemed from the start of 2024, green shoots appeared for the property sector.

Firstly, the catalyst came when the government unveiled the potential of setting up a special economic zone for Singapore and Johor.

Secondly, the inflow of data centre investments drove up land transactions, with many property developers which had landbanks in Johor starting to cash out at significant premiums to their entry prices.

The average transaction price of agriculture land suited for the data centres was in the range of RM60 per sq ft.

Most of these land were less than RM30 per sq ft a year ago. This led to investors paying attention to the market down south.

Furthermore, banks’ appetite for end-financing picked up in the past two years, with an increase in both loan application submissions and approvals.

The latest Federal Court decision in Obata-ambak Holdings Sdn Bhd v Prema Bonanza Sdn Bhd and two other appeals, which discussed the Ang Ming Lee case, stated the ruling on the EOT shall only apply prospectively and not retrospectively.

This was the cherry on the icing, allowing many developers faced by mounting LAD claims to breathe a sigh of relief. It is quite clear that 2024 is an important year for property developers, with the sector seemingly to be firing on all cylinders.

Yet, the Khazanah Research Institute director in a webinar last week, highlighted that our housing market is consistently unaffordable and was against offering “affordable financing” with long tenures.

She proposed for the migration from the current sell-then-build model to the buildand-sell model like other developed countries.

In my view, this policy idea is regressive in nature and not suitable to the current economic structure of Malaysia.

It is too shallow as the crux of the problem of property ownership in our country is due to low wage growth rather than high property price.

Affordability goes hand in hand with income. If the people’s incomes do not increase, affordability will always be a problem, regardless of whether there is affordable financing or otherwise.

Similarly, the migration to build-and-sell will not help the property market pricing in any way apart from reducing abandoned housing or “Project Sakit”.

The repercussion of a migration in model is far-reaching.

While I do agree that this would weed out many incompetent property developers and offer better protection to homebuyers, the downside would be the impact on the supply of property to the market and risk of financially strong property developers cornering the market, leading to oligopolistic or cartel behaviour.

This would eventually drive asset prices up further due to supply scarcity.

At the end of the day, I believe the rationale for property ownership differs from one person to another.

Some believe that real estate is among the safest and most reliable asset classes for investment purposes and hedging against inflation.

Others believe that real estate has limited upside, hence renting is more practical without the long-term loan commitments affecting their lifestyle preferences. This is especially prevalent among the youth today.

My personal view is that the property sector, like any other sector, has its own cycles, and depending on which point one enters the market, there will be different outcomes.

This will shape individual perspective when it comes to property ownership.

Whether the sector remains positive in the long term depends heavily on two key factors – population growth and a burgeoning middle-income society.

By Ng zhu hann Ng zhu hann is the chief executive officer of tradeview Capital. he is also a lawyer and the author of Once upon a time in Bursa. the views expressed here are the writer’s own.

https://www.thestar.com.my/business/insight/2024/08/03/property-market-and-affordability

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Money in housing, cautious optimism in industry

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PETALING JAYA: The property market is expected to remain cautiously optimistic in 2023, with the gradual increase in the Overnight Policy Rate (OPR) since last year likely to affect market activity, particularly on residential demand, says the Valuation and Property Services Department.

The outlook of the workforce in the construction sector and the increase in the price of building materials will also affect supply.

Department director-general Abdul Razak Yusak said internal and external factors, such as economic and financial developments both globally and in the country, would also have an impact on the real estate sector and the sentiment of industry players.

“Looking at the national economy which is projected to grow by 4% to 5% in 2023, supported by continued resilient domestic growth prospects, the property market is expected to remain cautiously optimistic in 2023,” he said.The first quarter of this year alone saw over 89,000 transactions worth RM42.31bil, which was higher than those recorded in pre-pandemic years, he said.

“The seasonal factor in house purchases, which is usually low at the beginning of the year, the increase in OPR and the decline in Consumer Sentiment Index (CSI) are among the factors that contributed to a decline in residential market activity in particular,” he said.

New residential launches, said Abdul Razak, were also indicating a cautious sentiment among developers, with the number recorded at nearly 4,700 units, which was less than those in previous years, while sales performance was moderate at 25.7%.

The decrease in new launches was in line with the decrease in the number of developers’ licences and advertising and sales permits of new housing sales and renewals approved by the Local Government Development Ministry from 5,641 in January and February last year to 2,911 during the same period this year, he added.

Johor recorded the highest number of new launches at 2,077 units or about 45% of the nationwide total with a sales performance of 24.9% while Selangor had the second highest at 791 units or 17% share with a sales performance of 37%.

Abdul Razak said in line with the cautious sentiment among developers, construction activity had slowed down in the first quarter of 2023.

“This is seen as a positive development to balance the unsold supply in the market,” he said, adding that the residential and serviced apartment overhang status continued to be positive.

“The number of overhang units has decreased to 26,872 units worth RM18.31bil in the first quarter of 2023 as a result of market absorption in all states, except Selangor. The volume and value of residential overhang decreased by 3.2% and 0.5% respectively compared with the fourth quarter of 2022,” he said.

Selangor recorded the highest number and value of overhang units, with 4,995 units worth RM4.47bil, followed by Johor at 4,759 units worth RM3.94bil, Kuala Lumpur with 3,423 units worth RM3.13bil, and Penang with 3,138 units worth RM2.48bil.

The purpose-built office (private) and shopping complex segment in Kuala Lumpur and Selangor, said Abdul Razak, should be given attention as there was a surplus of space, which was also expected to be severely affected by the inflow of new supply this year.This is as Kuala Lumpur recorded the highest available private purpose-built office space at 2.53 million square metres involving 290 buildings, followed by Selangor with 1.40 million square metres involving 192 buildings.

For the shopping complex segment, Selangor recorded the highest available retail space nationwide at 0.79 million square metres with 146 buildings followed by Kuala Lumpur at 0.56 million square metres with 97 buildings.

“Developers need to be more thorough and cautious before planning any new development and local authorities need to evaluate in detail before approving each new project,” said Abdul Razak.

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What the market is trying to tell investors?

Second catalyst: Cranes operate on residential buildings at a construction site in Beijing. China’s economic health is the second major concern that could spark off a crisis for Bursa and the world.

IN stock market language, when the charts point to a “dead cross” formation, it means that there is confirmation of a long-term bear market. This is as opposed to a “golden cross” that points to a bull market.

Based on weekly indicators emitting from Bursa Malaysia, a dead cross is coming to formation. The last time this pattern emerged was in the first quarter of 1997 and a year later, the “dead cross” chart was fully formed. By that time, the entire capital market was in flames.

The ringgit fell against the US dollar, banks were in trouble and the stock market hit a nadir of 261 points on Sept 4, 1998.

Technical indicators are no sure sign of market failure. It could change with sentiments. However, time and again it has been proven that the stock market runs six months ahead of what is to be expected in the real economy.

As for the nation’s economy, there is no denying that growth is slowing down. There are governance issues with regards to the handling of public funds.

However, the fact remains that for all the noise the foreign investors make, the Government did not have to pay a premium when it raised US$1.5bil debts a few weeks ago. This indicates that foreign investors have largely discounted local issues.

Nevertheless, the external headwinds are overwhelming and weigh heavy on the Malaysian economy.

It is already showing with the slew of corporate results streaming in. Companies are not doing well, as indicated by Tan Chong Motor Holdings Bhd chalking up its first loss in 18 years. Property developers that have made a pile from a great run in the last eight years are seeing miserable sales.

Malaysia is expected to see a growth of 4% this year, which is low for a small nation. Nonetheless, we are better off than some of our neighbours.

Everybody is cautious, but nobody is able to point a finger to the catalyst that could cause a severe correction to the stock market. Inevitably, it will stem from the economy – whether domestic or global.

There are several signs that have emerged which need some monitoring.

At the top of the list would be the price of oil that has a close correlation to the ringgit and the economy.

Ironically, when crude oil plunged below US$30 per barrel, the ringgit weakened significantly on the view that Malaysia was an exporter of energy and it impacted the country’s revenue.

However, in recent months, oil prices have recovered to about US$45 per barrel levels but the ringgit is continuing to see volatility. One reason is that the market is not convinced that crude oil will stabilise at current levels.

Conventional economic theory reasons that when oil prices fall, it should strengthen economic activity because the cost of doing business comes down. The International Monetary Fund estimates that for every US$20 drop in price per barrel of crude, the global economy should grow by 0.5%.

However, this is not happening because the major economic superpowers of the world are going through their own problems.

This points to China’s economic health, the second major concern that could spark off a crisis for Bursa and the world.

Nobody can authoritatively put a finger on the state of the debt levels of China, especially those held outside the financial sector. The latest figure being bandied about is that the non-financial sector debt is 279% of gross domestic product, according to data from the Bank of International Settlement.

However, the optimists contend that China’s strong growth supports borrowing. Also, the country is seeing high inflation, which in the longer term will cause debt to erode. In the process of growing the economy, China has adopted an approach to weakening the yuan to export its way out. Every time the yuan weakens, the ringgit falls.

The third indicator is the highly likely scenario of the US raising interest rates in the second half of the year from the current band of between 0.25% and 0.5%. It is a measure which, if materialises, will exert pressure on the ringgit.

The headline numbers show that the US economy is still in the stage of recovery. The unemployment rate in the world’s biggest economy has ticked up slightly to 5% from 4.9% previously based on April numbers, but wage rates are still steady, meaning people are still getting paid well.

People’s earnings are growing at an estimated 2.5% based on latest numbers, which means that inflation will kick in.

At the moment the possibility of the US Federal Reserve raising interest rates will not likely happen in the next month or so but there is a strong possibility may happen by the year-end as inflation starts to tick up. This would cause an outflow of funds from emerging economies such as Malaysia and the ringgit would come under pressure.

The fourth catalyst is also tied to the US. This time, it is the fear of Donald Trump becoming the next president. Trump prefers a strong dollar and has hinted of a haircut for those holding US dollar debt papers.

Although Trump has come out to state that he was misquoted on the US dollar debt paper issue, it has spooked investors holding US$14 trillion of US debt papers.

The markets will also watch with anxiety on how Trump deals with policies of other countries such as China, Japan and the European Union (EU) in weakening their currencies to boost the economy.

As the run-up to the presidential elections takes place in November this year, if it becomes increasingly apparent that Trump will triumph over Hillary Clinton, then emerging markets will be spooked.

And finally, the last possible catalyst to cause a global shock is the possibility of Britain leaving the EU or better known as Brexit. Increasingly, the chances of it happening are remote. Nevertheless, nobody can tell for sure until the referendum on June 23.

All the five economic events will have a bearing on the ringgit. Everything points to the US dollar appreciating in the future, leaving the ringgit in defensive mode.

This is already being reflected in the negative mood of the stock market. If there is less noise in the domestic economy on such matters relating to the handling of public funds to governance, it would help the case for the ringgit.

The market is generally correct in predicting the future. But sometimes, the unexpected can happen – such as China handling its debt problems better than expected or Trump not being a candidate for the Republicans.

Such unexpected incidences can quickly reverse the sentiments of the market and the ringgit.

By M. Shanmugam The alternative view The Star

Go to Market Watch

 http://www.thestar.com.my/business/marketwatch/

BMKLCI

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Foreign funds comeback, rising interests in Malaysian properties and equities

Foreign interest in Malaysian real estate picks up: Knight Frank

KUALA LUMPUR: Foreign investors' interest in Malaysian real estate, particularly commercial property, is picking up due to the weakened ringgit, said Knight Frank Malaysia Sdn Bhd.

"What we are noticing is that given the ringgit is currently at one of its lowest (levels) in the last many years, interest in Malaysian real estate is actually now coming back because people feel there is upside not only in terms of capital value appreciation but also the fact that the ringgit will move back possibly to better levels. We are certainly seeing this," its managing director Sarkunan Subramaniam told reporters at a briefing on Knight Frank's The Wealth Report 2016 yesterday.

Executive director James Buckley said it has been seeing interest from the Middle East and the US who are typically opportunistic investors attracted by the currency play here which, combined with the slightly subdued property market fundamentals, makes it a good time for them to enter the market.

"I've got two significant groups coming this week ... one from the US, one from Japan. It's a regular basis now and has been picking up from last year. A lot of them are doing initial trips to understand the market a bit better. They are really focused on commercial investments so the office market, retail market and some are interested in hospitality assets as well," he said.

Buckley said in the past, foreign investors investing in Malaysia were typically from Japan and the growing interest from the US is surprising as the Malaysian market is small compared with the US market.

He said these investors are attracted by the currency and the slight oversupply of office space in Kuala Lumpur.

"It is a good time for them to negotiate some good deals here," Buckley said, adding that most of the foreign interest in Malaysia come from Korea, Japan, Singapore and the Middle East.

Meanwhile, the trend among local property investors is also changing, with interest moving from office space and agricultural land to office, retail and hospitality assets. However, residential property remains the core real estate investment for Malaysians.

"In the global context, interest in commercial property is growing quite strongly. What came out of The Wealth Report is that 47% of UHNWIs (ultra high net worth individuals) are expecting to increase their allocation in commercial property. In the Malaysian perspective, we do see a gradual rise in the interest in commercial property. Particular popular choices for Malaysians are office and retail investments, and they are looking to increase their exposure to these assets over the next 10 years," said Buckley.

He said there is a misconception that investing in commercial property is more complicated while some feel they lack experience investing in this sector but interest is picking up as investors are becoming more familiar with the market and understand better the benefits of investing in commercial property.

The report showed that Malaysian high net worth individuals (65% of survey respondents) have increased their asset allocation to residential property.

Moving forward, 65% of Malaysian survey respondents said they will increase asset allocation to residential property in the next 10 years.

In terms of property purchases this year, 39% of Malaysian UHNWIs said they are considering residential purchases. This is more than 29% of global UHNWIs who intend to buy residential property this year.

On average, Malaysian UHNWIs own more properties (4.7) compared with the global and regional average of 3.7 and 3.92 respectively. As for overseas investments, the top three locations for Malaysian investors are Australia (Melbourne), the UK (London) and Singapore.

Bulls making a comeback

Foreign funds are putting money in emerging markets

HUMAN beings have a natural tendency to fear heights – it’s a natural survival instinct which worked well in the wilderness and in the outback, but one which severely plays against us when it comes to the stock market.

Seven years ago, back in early 2009, these were some of the top financial headlines in the US:

> Georgo Soros says US banks ‘basically insolvent’

No one knew it then, but the Dow Jones was about to embark on a seven-year bull run and would gain some 92% over that period. Riding along was the FBM KLCI, which gained 85% over the same period.

For sure the ride has been bumpy and riddled with sharp corrections. But for investors who held on to their stocks, they would have been rewarded with handsome returns.

For any investor invested in the market – volatility will always be there. But as long as they are able to endure the frailty and fluctuations of the market, the long-term rewards historically outweigh the short-term fickleness.

We have heard it many times before – the best time to own stocks is when sentiment is at its worst,

This was especially apparent in early 2009 when the US economy was on the brink of a banking collapse, In those dark days, there were more forecasts of Black Mondays than predictions of light at the end of the tunnel.

Eng: ‘The market has had a good run since January.’

The stock market, as always, had a mind of its own. Despite the proclaimation of dooms and the fall of many American banks, the Dow was heading almost on a straight upward trajectory by mid-March 2009. 

Sir John Templeton said: “Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.”

That was true seven years ago, 50 years ago, and definitely just as true today.

Logically speaking, what comes down must go up.

Earnings can still be nasty, but doesn’t the market always behave a year forward. At the heart of it all, the market is made up of buyers and sellers. All it takes are a few buyers during a down period to sniff out an opportunity, and suddenly, the market is edging upwards.

It’s the same story with oil prices. Do not expect the coast to be completely clear – for example no more excess inventories, oil demand significantly outpacing supply or the Organisation of the Petroleum Exporting Countries (Opec) deciding to cut production by 50% – before we see oil prices moving up.

By the time these signs are crystal clear, oil prices have made new highs months ago.

In any case, last week the International Energy Agency (IEA) said that oil prices had bottomed out due to US and other output cuts outside the Middle East-dominated Opec.

The US rig count fell for a 12th straight week last week to a total of 386, its lowest since December 2009 as drillers continue to slash capital expenditure.

Zulkifli: ‘These are still early days of a recovery. People are still sceptical ...’

The problem now is that after a seven-year run, investors are getting nervous. Investors have mostly been in a flux wondering where the market is heading. Most investors are waiting for the crash to come. They talk about a sluggish economic outlook, falling earnings, recessions in commodity-heavy nations, slowing growth in China, negative interest rates, the end of quantitative easing in the US, the UK (potential Brexit) and flatter yield curves. 

Has the market stalled and lost some of its stamina? With the expectation only of mediocre growth and low yields, is it time to sell stocks?

Behind the scenes, some under-appreciated indicators are starting to show some light.

First of all, the ringgit has been strengthening – a reflection of foreign money coming back to Malaysia. It strengthened 0.6% this week to RM4.09 against the greenback.

Last week, foreigners bought listed equities amounting to RM1.04bil on Bursa Malaysia, higher than the RM972.2mil acquired in the preceding week. To date, there are some 12 consecutive weeks of total net inflows and brings cumulative year-to-date foreign purchases to RM1.6bil.

For the entire 2015, there was a net outflow of RM19.5bil.

Meanwhile the FBM KLCI closed at 1,703.19 on Thursday, which is also its six-month month high. The seven-month high is 1,744.19 recorded on Aug 3, 2015.

From a charting perspective, a recovery in the FBM KLCI appears to be playing out.

“We reiterate our view that KLCI must close above 1700 levels convincingly to sustain the ongoing rally from 1600, with key upside target at 1710 (March 7 high), 1727 (Oct 19 high) and 1740 (200-day simple moving average) levels. Failure to close above 1700 will see the index continue its short-term congested range-bound consolidation within the 1660-1700 territory,” says Hong Leong analyst Nick Foo.

Etiqa Insurance & Takaful head of research Chris Eng, on the other hand, feels that the market is toppish for now.

“The market has had a good run since January. It may have a few more legs to run, but come April, it will be earnings results in the US, and in May, it will be earnings result in Malaysia. We aren’t expecting very positive earnings coming out, so market may start falling again by April,” says Eng.


From a trading perspective, he would ask clients to sell into strength.

On a fundamental perspective, however, he isn’t expecting a recession, well at least not this year. He would still advice investors to stay invested in equities.

“We are expecting some weakness in the market come middle of the year. That would be a better time to buy. We would identify that weakness and look for opportunities then,” says Eng.

MIDF Research has been recommending its clients to start buying since the start of the fourth quarter last year.

“These are still early days of a recovery. People are still sceptical, especially retail investors. But we have been tracking the money flows, and foreigners have been net buyers every single day of the 14 trading days so far this month, which is a phenomenon not seen in more than two years” said Zulkifli Hamzah, head of MIDF Research.

According to Zulkifli, the Malaysian equity market is benefiting from a tide of global liquidity flowing into Asia. Some of the money is actually global funds in China, being reallocated to other Asian markets as the outlook in Asia’s biggest economy is challenging.

“In the bond market, Malaysia started to look attractive to the foreigners as early as September last year. The low global interest rate environment, with negative rates in some countries, has made local yields very attractive indeed. That is reinforced by the depressed Ringgit,” said Zulkifli.

“Overall, we are positive on the market. Sceptism of the market has been partly due to the relatively restrained climb in the index. But this has been due to selling by local funds, which are understandably taking the opportunity of the market’s upward march to realize their profits. We also do not expect to see such a steep incline in the indices because of rotational forces at work,”

“Global investors are not going to come in and buy blindly across the board although the Ringgit is seen as undervalued. They will be selective and buy only those stocks that they see value. We believe the current uptrend has legs. However, there are potential potholes which may cause temporary retracement, at which point it would be opportune to enter the market,” said Zulkifli.

He added that the changing of guard in Bank Negara and the Sarawak state election would be closely watched by foreigners.

No rate hike is good for Malaysia

On Wednesday, Federal Reserve officials lowered their view of the economy and said they likely won’t raise interest rates as swiftly as they had previously anticipated as there are lingering risks posed by soft global growth and financial-market volatility.

Policy makers left short-term interest rates steady and said they would raise their benchmark rate just twice this year, after an initial increase in December 2015, down from the four they previously predicted.

Last week European Central Bank (ECB) chief Mario Draghi announced a much bigger and wider-ranging stimulus package than anyone had expected

He increased his purchases of financial assets by a hefty 20 billion euros per month (from 60 billion-80 billion euros), pushed interest rates lower into negative territory (by 10 basis points), improved financing for the banks and announced his intention to buy investment grade corporate bonds.

In other words, the ECB will pay banks 0.4% to lend. This puts the eurozone in a negative interest-rate situation.

This move inevitably makes Malaysia more attractive.

Recessionary pressures and low interest rates in the US are a boon for emerging markets like Malaysia. This is further helped by economies like Japan and China which are continuing to cut interest rates to kickstart their economies.

With US and eurozone interest rates having stayed in negative territory for so long, and doubts on future rate hikes, investors are getting desperate for yields.

So they come to Malaysia, where the average yield on a 10-year dollar bond is higher by some 140 basis points than a similar US Treasury 10-year note.

Also, after a torrent of bad news, some confidence is returning to Malaysia.

Last month, Fitch Ratings affirmed Malaysia’s long-term foreign and local-currency issuer default ratings (IDRs) at A- and A respectively, with stable outlook.

Malaysia’s senior unsecured local-currency bonds were also affirmed at A while the country ceiling was affirmed at A and the short-term foreign-currency IDR at F2.

The three rating agencies – Moodys, S&P and Fitch Ratings – have given the same credit rating of between A3 and A- with stable outlook for Malaysia.

Bank Negara also announced that Malaysia’s economy grew by 4.5% in the final quarter of last year, which was better than expected. This brings the full-year gross domestic product growth to 5% from 6% in 2014.

The recent stability in the ringgit was also a positive factor for foreign investors, and this has taken away some of the foreign exchange risk of investing here.

The ringgit is the best-performing emerging-market Asian currency over the past three months, having been one of the worst performers last year. Year-to-date, the ringgit has gained 2.05% against the US dollar.

The economy is on a better footing now that the Government has revised its budget based on oil prices between US$30 and US$35, and the country is on track to achieve its targeted budget deficit of 3.1%.

by Tee Lin Say The Star

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