SOS Malaysia Economy & Stock Market

Malaysia:

Household debt is HIGH i.e. 36% of total loans from banks

Corporate Debt is Not Low, i.e. commercial loan for properties

Government Debt - Hmm, not sure about it

Food price, especially from Chinese stores in coffee shops has increase about RM0.50 per plate from RM3.50 or RM4.00. Similar increase in previous years. Food inflation in DOUBLE Digits.

What about HOUSE price, needless to say, prices increase in 20-50% p.a. And as usual, developers always says that they are catching up on the lost year 2008/9.

What will happen when INTEREST rates increase?

What will the hot money turn COLD?

What will happen to property SPECULTORS when prices drop?

What will happen new buyers having problems getting financing from BANKS when NPL starts to peak as a result of interest rate spike after the General Election?

What will happen to your share prices when the government is tired of supporting the share market?

What will happen when BNM increase INTEREST rate rapidly like China?

MyView

Of course, there is a lot of what ifs. The spike in asset prices mainly resulting from 2 factors, one is the low interest rate regime (plus easy money, 5/95 scheme) + hot money (from overseas and speculators). REMEMBERS both factors is in for the SHORT RUN. So, it is a matter of time before the MUSIC stops. Be very cautious.

Reduce when GE is annouced or US stock market tank, whichever is earlier.Take the Government statistics with a lot of salt.