This headlines send a signal to all investors from equity to property that the fundamental is diminishing. The catchy words : Malaysia and Malaysian are over-geared. The debt levels are as follows: Government (53% GDP), Household (82% of GDP) and Corporate (95.8%).
As debt level is high, the GDP growth is at risk. With limited borrowing capacity, high yield investment opportunity is missed (negative to GDP growth) and current income generated is required to service the debts. Should the interest rate rise due to
1. FED taper bond purchase - USD liquidity tightening leads to reverse of carry trade
2. FED will normlise it policy rate to higher level (0.25% now). hence the only direction is up.
It really does not look good for equity and property market in 2014. BNM expect GDP to be 5-5.5% in 2013 but street economists are generally agreeing to 4.5 - 5% only. I m doubting that 2014 GDP could breach 4% mark.
Does it mean 2014 will be a quiet year. We shall see.
No comments:
Post a Comment