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Strategies & Market Trends : Asia Forum
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To: Worswick who wrote (69)12/23/1997 8:59:00 PM
From: B Tate  Read Replies (2) of 9980
 
Worswick - Generally speaking the attitude is wait and worry some. Seems most are waiting for Chinese New Year and Hari Raya (Muslim New Year) to be over with. Historically the share market has taken a dip prior to the celebration of Chinese New Year. Folks are waiting to see HOW much of if any it will go down in the next 3 -4 weeks.

The money supply has been basically shut off, no financing of new cars or properties. I'm hearing that some property financing may continue after Bank Nigara issues new guidlines. (will probably allow us ex-pats to continue purchasing with 'hard' currency. ;-))

For now the pollicy on new or used auto purchases is cash and carry. (Expect 50% reduction in the number of new car sales in '98)

Price hikes are now starting to find their way into the market for some of the basics, chickens, sugar, fuel etc. Not extreme yet but there anyway. Malaysians in general have learned from their neighbors to the north, and are wary the same situation will occur.

While real estate over production is huge here, it may not be as severe as Thailand. Many of the MEGA Projects have been "delayed" but many are to the point of being nearly completed and probably should be.

I think part of the problem was that many infrastructure projects were delayed to provide the consistent 8+% annual growth everyone crowed over. Now they have to catch up and picked the absolute wrong time/caused it to be the absolute wrong time. The impetus was the coming of the Commonwealth Games in Sept. 98. The government wanted the world to see a vibrant modern country with all the amenities of a world power. Now I fear visitors will see instead a half finished construction site.

We won't know the answer about potential recovery until Feb/Mar. If the gov't takes further strong action this country will recover rapidly. If the egos get in the way who knows.

BT
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