Malaysian banks solid, says investment guru

Faber owns stock s in the consumer and banking sectors.

KUALA LUMPUR: Malaysian banks are solid, as they are not involved in risky financial instruments such as derivaties by US banks, said investment guru Dr Marc Faber.

Faber, the publisher of the widely-read Gloom, Boom & Doom report, said that despite Fitch Ratings’ recent negative outlook on Malaysia, the country was relatively well compared to other emerging countries.

Given the choice of between US and Malaysian equities, Faber expressed more interest towards the latter. “Malaysian equities are not exciting. However, they are relatively stable, supported by a well-balanced economy coupled with no major downward risks,” he said.

Malaysia’s financial condition, said Faber, was one of the strongest in the world today due to the prudent management of its financial system.

Faber said that in Malaysia, he owned shares in some companies in the consumer sector as well as the banking sector, such as Public Bank Bhd and Malayan Banking Bhd.

He said stocks in the consumer sector were inexpensive a few years ago and were now fully priced, with limited upside. “While they are not going to explode, they can still grow in the long term, parallel to the country’s economy,” he said.

On Malaysia’s downward revision in its growth projection of between 4% and 5%, he said people should bear in mind that this was growth in a world where most countries, like European countries, were not growing at all. – Bernama