An investor is not concerned about the potential political fallout on the ringgit as she expected the country’s leadership to remain “more or less status quo”.
Speaking to CNBC, Tan Min Lan said: “There are ongoing issues, but the opposition is in disarray and therefore there is no alternative. And hence a change in government in Malaysia is highly unlikely.”
Tan, who heads the Asia Pacific investment office for UBS wealth management, was reacting to strategists at the National Australia Bank (NAB).
According to NAB, the political turmoil does not herald good news for the Malaysian currency.
“The simmering political crisis remains and is likely to continue to undermine investor confidence with speculation about elections continuing to swirl,” it said.
NAB had made its forecast in a note titled “Malaysia – Truly awkward,” which is a sarcastic take on the country’s tourism advertising slogan, “Malaysia, truly Asia.”
With the ringgit continuing to slide against the US dollar, Tan remained positive of the situation.
“The current account position is very comfortable. The fiscal balance is very well managed. The monetary policy, as well, Bank Negara continues to have a very good standing with international investors,” she told CNBC.
Expressing concern over the high foreign ownership of Malaysia’s domestic bonds – at nearly 40 percent on some measurements – she however noted that the country was still rated single-A by the three major credit rating agencies Fitch, S&P and Moody’s.
Your views are valuable to us, but Sarawak Report kindly requests that comments be deposited in suitable language and do not support racism or violence or we will be forced to withdraw them from the site.