Investors will be watching
HONG KONG: The ringgit may weaken if foreign investors start selling Malaysian government bonds after the surprise election outcome, says Kelvin Tay, regional chief investment officer at UBS Wealth Management.
Investors will be watching “how far and to what extent” the new administration will change the policies of the previous government, Tay says in an interview on Bloomberg Television.
UBS Wealth Management has been underweight Malaysia over the last three years, largely because a lot of the structural issues in the economy weren’t addressed
One of former premier Tun Dr Mahathir Mohamad’s pledges has been scraping the 6% GST, which would widen the budget deficit to about 5% from 3% last year.
The new government may scrap some infrastructure projects to mitigate revenue shortfall, which may hit construction companies’ shares
Local markets remain shut for the rest of the week. Overseas investors held 29% of Malaysia’s local-currency government bonds at the end of last year, according data compiled by Asian Development Bank.- Bloomberg
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