INTEREST rates are not expected to rise in the near future, according to Standard Chartered Bank Malaysia Bhd chief executive officer and managing director Shayne Nelson.
Nelson said there was massive liquidity in the local market and that Malaysian companies were generally flush with funds.
“There's no reason for interest rates to rise,” he said after the launch of Standard Chartered-Aiesec HIV Learning Network programme in Kuala Lumpur yesterday.
The two-day training programme is aimed at creating awareness among the youth of the virus through their peers.
Malaysian AIDS Council president Datin Paduka Marina Mahathir witnessed the launch.
Nelson said the consensus among financial institutions was that US interest rates would rise while Malaysia's would remain relatively stable.
“There's been a decoupling of Malaysia's interest rates from the US interest rates and how long the decoupling continues will depend on several factors,'' he said. “A lot will depend on how high US interest rates rise and investors' reaction to the hike.”
He added that money moved around the world based on perception and that interest rates must be attractive enough for investors before funds moved the other way.
On rising oil prices, Nelson said Standard Chartered had not seen any significant impact on companies having financial dealings with the bank.
“We expect the bank to continue growing at a healthy rate. We are seeing better growth rate in the mortgage market while the corporate division's growth rate has been fairly subdued for over a year.
“Our mortgage division is growing above the industry average of about 15%. But the corporate division's growth rate has been generally slow for most banks with the exception of the residential property market, which remains upbeat,” Nelson said.
However, he said the bank expected the corporate division to chart better growth soon.
“Generally, the corporate growth rate rises when capital formation reaches above 90%. Most local companies are already at this stage and are poised to invest further in capital.
“Many local companies now have sufficient internal funds to invest. However, some may require loans,” Nelson said.
Standard Chartered spends about US$2mil a year on HIV education programmes to create global awareness of the virus.