Malaysia Economic News

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#1
Franklin Templeton snapping up debt in Malaysia



Franklin Templeton, whose contrarian bets made profits in Ireland and face losses in war-torn Ukraine, has been buying debt in Malaysia as global funds flee.
The San Mateo, California-based money manager, which oversees about US$855 billion (S$1.2 trillion), has over the past two years become the largest holder of Malaysian government local-currency bonds due in the next 30 months, among funds that make their quarterly filings public, data compiled by Bloomberg shows.
Its various funds added an aggregate RM9.64 billion (S$3.25 billion) this year to holdings maturing from next month to February 2018, bringing the firm's total claim to RM23.1 billion, the data shows.


Malaysia's currency and bonds are slumping as probes into donations to Prime Minister Najib Razak cloud the outlook for an economy rocked by plunging oil prices and a sell-off in emerging markets. PineBridge Investments said this month it recently trimmed Malaysian sovereign bonds, and the cost to insure the debt has soared amid the scandal surrounding state investment firm 1Malaysia Development Berhad (1MDB).
"While the Malaysian market has come under extreme stress, we still believe in the long-term value of our investment in the country," said Mr Michael Hasenstab, chief investment officer at Templeton Global Macro, which oversaw more than US$170 billion as of June 30. The Malaysian economy is "far stronger today than it was" during either the 2008 global financial crisis or the Asian crisis of the late 1990s, he said.
Quote:LONG-TERM VIEW STILL POSITIVE
While the Malaysian market has come under extreme stress, we still believe in the long-term value of our investment in the country.
MR MICHAEL HASENSTAB, Templeton Global Macro's chief investment officer
Mr Hasenstab's bold trades have helped him become one of the world's most successful bond fund managers. He helped trigger a turnaround in sentiment for Ireland - and made billions of dollars - by buying the nation's debt in July 2011, eight months after the country entered into an international bailout.
Templeton started to build its position in Malaysian local government bonds more aggressively at the beginning of the year, according to Bloomberg data. The asset manager's biggest exposure is to notes due next month, of which its funds own about 64 per cent. The fund data compiled by Bloomberg is based on numbers for periods ended either June 30 or July 31, depending on each fund's reporting timetable.
The Templeton Global Bond Fund, managed by Mr Hasenstab, has had an average annual return of 7.3 per cent over the ten years ended July 31 and a loss, including reinvested dividends, of 1.48 per cent this year through July, the firm said. In net asset value terms, it has fallen 6.2 per cent this year, according Bloomberg data.
Both Moody's Investors Service and Standard & Poor's are standing by their respective A3- and A-ratings on Malaysia as they expect the government to stay on course with its reforms.
The yield on Malaysia's five-year government bond rose to a more than six-year high of 4.05 per cent on Monday last week, and ended the week at 4.03 per cent. The cost of protecting the country's debt against non-payment rose to 189 basis points last Friday, the highest since October 2011.
The ringgit has slumped 17 per cent this year against the US dollar, the worst performing Asian currency after Myanmar's.
"We believe the current movement in the exchange rate has overshot fundamental value," Mr Hasenstab said.
BLOOMBERG
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#2
The risk-free rate has gone up. I reckon M'sia based company discount rate should be raised for valuation...

Malaysian 10-year bond yield rises to highest level since 2008

KUALA LUMPUR (Aug 25): Malaysian government bonds fell, pushing the 10-year yield to the highest since 2008, as the weak ringgit, low oil prices and a political scandal sap demand.

The ringgit has plunged 18% this year in the worst performance in Asia as falling crude prices reduce Malaysia's export revenue and investors sour on the country amid calls for Prime Minister Najib Razak to resign over political donations. A rout in global stock markets sparked by the devaluation of China's yuan on Aug 11 is worsening sentiment further.

The yield on the sovereign notes due Sept 2025 climbed five basis points to 4.45% as of 11.22 am in Kuala Lumpur, according to Bursa Malaysia prices. It has risen 18 basis points in a four-day streak and is up 38 points so far this month. The five-year yield increased four basis points to 4.07%.
...
http://www.theedgemarkets.com/sg/article...level-2008
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#3
(25-08-2015, 04:52 PM)CityFarmer Wrote: The risk-free rate has gone up. I reckon M'sia based company discount rate should be raised for valuation...

Malaysian 10-year bond yield rises to highest level since 2008

KUALA LUMPUR (Aug 25): Malaysian government bonds fell, pushing the 10-year yield to the highest since 2008, as the weak ringgit, low oil prices and a political scandal sap demand.

The ringgit has plunged 18% this year in the worst performance in Asia as falling crude prices reduce Malaysia's export revenue and investors sour on the country amid calls for Prime Minister Najib Razak to resign over political donations. A rout in global stock markets sparked by the devaluation of China's yuan on Aug 11 is worsening sentiment further.

The yield on the sovereign notes due Sept 2025 climbed five basis points to 4.45% as of 11.22 am in Kuala Lumpur, according to Bursa Malaysia prices. It has risen 18 basis points in a four-day streak and is up 38 points so far this month. The five-year yield increased four basis points to 4.07%.
...
http://www.theedgemarkets.com/sg/article...level-2008

we can now get 3 ringgit for every singapore dollar. This is an historical moment for our currencies.
Virtual currencies are worth virtually nothing.
http://thebluefund.blogspot.com
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#4
The plunge in ringgit affects SG businesses too...

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#5
The economic condition, has reached a point for Johor's ruler to speak out...

Sultan of Johor criticises Malaysian govt

KUALA LUMPUR — In a rare rebuke, Johor’s ruler Sultan Ibrahim Sultan Iskandar yesterday urged the federal government to deal with the unstable political and economic issues in the country, including the free fall of the Malaysian ringgit.

The Sultan said although as a royal he cannot interfere in political matters, he was responsible for the wellbeing and prosperity of his subjects.
...
http://www.todayonline.com/world/asia/su...ysian-govt
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#6
(26-08-2015, 09:10 AM)CityFarmer Wrote: The economic condition, has reached a point for Johor's ruler to speak out...

Sultan of Johor criticises Malaysian govt

KUALA LUMPUR — In a rare rebuke, Johor’s ruler Sultan Ibrahim Sultan Iskandar yesterday urged the federal government to deal with the unstable political and economic issues in the country, including the free fall of the Malaysian ringgit.

The Sultan said although as a royal he cannot interfere in political matters, he was responsible for the wellbeing and prosperity of his subjects.
...
http://www.todayonline.com/world/asia/su...ysian-govt

actually it's for his own interest (have you guys seen the recent royal monuments he has constructed when you go shopping in JB?)

He has his hand in the honey pot for most of the projects being built by the Chinese in JB. Stands to lose millions if the economic/political situation in Msia continues to deteriorate, which would discourage further investment and money coming in for the projects.
Virtual currencies are worth virtually nothing.
http://thebluefund.blogspot.com
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#7
(26-08-2015, 09:23 AM)BlueKelah Wrote:
(26-08-2015, 09:10 AM)CityFarmer Wrote: The economic condition, has reached a point for Johor's ruler to speak out...

Sultan of Johor criticises Malaysian govt

KUALA LUMPUR — In a rare rebuke, Johor’s ruler Sultan Ibrahim Sultan Iskandar yesterday urged the federal government to deal with the unstable political and economic issues in the country, including the free fall of the Malaysian ringgit.

The Sultan said although as a royal he cannot interfere in political matters, he was responsible for the wellbeing and prosperity of his subjects.
...
http://www.todayonline.com/world/asia/su...ysian-govt

actually it's for his own interest (have you guys seen the recent royal monuments he has constructed when you go shopping in JB?)

He has his hand in the honey pot for most of the projects being built by the Chinese in JB. Stands to lose millions if the economic/political situation in Msia continues to deteriorate, which would discourage further investment and money coming in for the projects.

where are these monuments? I usually hang out at Bukit Indah and Sutera Mall only.

Some said these 'patterns' are Federal Govt targeting Sultan and his interests. JB Sultan is friendly to SG.

BTW, Johor Sultan is the only with own private army. “Therefore, I urge the ruling government to deal with the problems we are facing now, among which is the deteriorating value of the ringgit,” he said in his speech to mark the 50th anniversary of Johor’s special forces regiment.
"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
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#8
(26-08-2015, 09:23 AM)BlueKelah Wrote:
(26-08-2015, 09:10 AM)CityFarmer Wrote: The economic condition, has reached a point for Johor's ruler to speak out...

Sultan of Johor criticises Malaysian govt

KUALA LUMPUR — In a rare rebuke, Johor’s ruler Sultan Ibrahim Sultan Iskandar yesterday urged the federal government to deal with the unstable political and economic issues in the country, including the free fall of the Malaysian ringgit.

The Sultan said although as a royal he cannot interfere in political matters, he was responsible for the wellbeing and prosperity of his subjects.
...
http://www.todayonline.com/world/asia/su...ysian-govt

actually it's for his own interest (have you guys seen the recent royal monuments he has constructed when you go shopping in JB?)

He has his hand in the honey pot for most of the projects being built by the Chinese in JB. Stands to lose millions if the economic/political situation in Msia continues to deteriorate, which would discourage further investment and money coming in for the projects.
My friends and I were joking that JB could merge with SG if this goes on.. [emoji14]

Sent from my D5503 using Tapatalk
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#9
I hope not. Don't want to average down. Haha.
"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
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#10
(26-08-2015, 10:47 AM)opmi Wrote: I hope not. Don't want to average down. Haha.

It sounded familiar. One highly educated Singaporean commented, he didn't want to "average down" to attend a mandarin business language course.  Tongue

I am surprised to hear from acquaintances, that more Singaporeans are getting WP, to work in Johor, due to shifting of biz operation from Singapore to Johor. I can't confirm that, but it might be true, and getting more true over time...
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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