Malaysia relatively unattractive to investors: resulting in GDP fall, exports moderation

Malaysia relatively unattractive to investors: resulting in GDP fall, exports moderation

February 4, 2018 0 By WFTV

Malaysia is an unattractive investment destination compared to other Asean nations, this due to its expensive fundamental valuations.

On Feb 1, the VP Bank said in a forecast on Malaysia that the country’s gross domestic product (GDP) will fall from 5.9% to 5% in 2018.

It added that this is due to low investments. which are expected to decline from 6.4% in 2017 to 3.8% in 2018, as Malaysia remains a “challenging market” for alpha investors.

“The critical aspect concerning Malaysia is a quite expensive fundamental valuation. In spite of the robust economic developments, earnings momentum slows down further and the country – as investment region – is relatively unattractive versus other ASEAN countries,” VP Bank said.

Exports increased last year, which was mainly due to the Asia-wide tech cycle. The rising palm oil and LNG volumes and prices also supported the increase, including the rise in rural incomes.

However, VP Bank said: “We expect external conditions to remain supportive in 2018, but export volume growth will likely moderate from its 2017 pace, and imports should pick up further alongside various big-ticket infrastructure projects.”

Further, the inflation rate is expected to inch down to 3.1% in 2018, whilst private consumption will also fall to 5.3%.