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Jeffrey
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Posting #11: Tue Feb 6th, 2007 14:32 |
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Statistics show it's stronger now and more resilient than ever.
* Per capita income: RM12,079 (1998) >> RM18,039 (2005)
* Foreign direct investments: RM13.063b (1998) >> RM17.88b (2005)
* Gross Domestic Product: RM182.2b (1998) >> RM277.2b est. (2006)
* International reserves: US$30.85b (1999) >> US$70.48b (2005)
* KLCI Index: 262.7pts (9/1/98) >> 1,225.73pts (yesterday)
KUALA LUMPUR: A decade after the Asian financial crisis, the economy is at its best shape, analysts have pronounced.
Not only has Malaysia’s economy come out of crisis mode, statistics show that it is strong enough to face future shocks.
"Malaysia is now in better shape to withstand any mega surge in liquidity that could potentially destabilise the country," said OSK Research economist Sia Ket Ee.
the whole story can be got here:-http://www.nst.com.my/Current_News/nst/Tuesday/Frontpage/20070206075723/Article/index_html
Comments:-
The Economist has a very good indicator, the price of the Big Mac. What did it cost then and what does it cost now, for the very same burger? To expand further, utilities, what were the rates then and now, what is the buying power of the ringgit, did it remain the same, or did it diminish greatly? Not one word about unemployment and inflation. What about Consumer Confidence?
Half the truth is NOT the truth.
So, the economy is in good shape?
Last edited on Tue Feb 6th, 2007 14:40 by Jeffrey
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Kop
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Posting #12: Tue Feb 6th, 2007 14:36 |
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| Let's convert all these figures into USD terms and have another look. Or maybe we convert to SGD or AUD or the mighty pound.
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Jeffrey
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Posting #13: Tue Feb 6th, 2007 15:46 |
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During the time span at hand, the ringgit was pegged.
I believe the ringgit was allowed to appreciate to curb imported inflation, ie, goods purchased and imported into the country causing a hike in prices.
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Jeffrey
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Posting #14: Thu Feb 8th, 2007 06:38 |
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Asli: Malaysia's economy to grow 5.9% in 2007, 2008
Kevin Tan & Yap Yew Jin
The country's economy is expected to grow by 5.9% in 2007 and 2008, riding on higher government spending under the Ninth Malaysia Plan (9MP) and soaring foreign and domestic investors' confidence, the Asian Strategy and Leadership Institute (Asli) said.
“The projected rise will be close to the country’s potential output growth estimated at 6% per annum,” Asli senior economic research fellow Datuk Dr Gan Khuan Poh told reporters in Kuala Lumpur on Feb 7.
He said the pace of investments was anticipated to continue with national development spending rising in tandem with the expected strengthening of investors’ confidence.
“Total investment is projected to grow at 8.1% annually in 2007 and 2008 while private investment is forecast to expand by 9.9% in 2007 and 10.3% in 2008,” Gan said.
Besides the boost from the 2% reduction in corporate income tax rate starting 2007, the ringgit appreciation was also expected to facilitate private investment through lowering the cost of imported technology, machinery and expertise, he added.
Meanwhile, public investment would grow at 6.5% in 2007 and 6.2% in 2008 as the implementation of 9MP projects are likely to peak in the second and third year of the five-year development plan from 2006 to 2010.
“These projects include the commercial and industrial projects earmarked in three development corridors in Peninsular Malaysia and higher allocation for infrastructure development in Sabah and Sarawak,” Gan said.
However, the pace of Malaysia’s gross exports is likely to ease to about 9% in 2007 before picking up slightly to 9.5% in 2008 as the US economic growth is anticipated to moderate.
“Gross imports are forecast to expand at 9.7% in 2007 and 11% in 2008, outpacing exports as domestic demands and imports are stimulated by a strengthening currency,” he said.
Notwithstanding the higher anticipated import growth, Malaysia’s trade surplus is forecast to rise to RM110 billion and RM115 billion in 2007 and 2008 respectively as the volume of exports exceeds imports.
On the ringgit, which breached 3.45 to the US dollar yesterday, Gan said Asli was expecting the currency to strengthen further to 3.40 to the US dollar by year-end and to 3.30 by end-2008.
He said the ringgit forecast was based on Malaysia’s current account surplus and reserves. As of now, Bank Negara Malaysia’s foreign reserves can last for more than eight months.
On whether the rising ringgit would affect Malaysia’s exports, Gan said trade competitiveness did not rely on foreign exchange only.
A stronger ringgit also allows for cheaper imports of capital goods for companies to improve their production capacity, he added.Last edited on Thu Feb 8th, 2007 06:40 by Jeffrey
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Jeffrey
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Posting #15: Sat Feb 10th, 2007 23:17 |
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From Jeff Ooi's Screenshots
What powered the current bull run? Will it sustain?
What powered the bull run that drove up KLCI to 1240 points?
According to MIMB Investment Bank, which was quoted by Oriental Daily News, it's due to substantial amount of hedge funds getting into the Malaysian stock market. Quote:
These hedge funds usually borrowed money from Japan, which offers exceptionally low interests. They had the Japanese Yen converted into ringgit, and then bought into the ringgit-based counters.
As a result, when the ringgit strengthens, and when the stock market goes up, these hedge funds will enjoy double gain.
Now, don't ask me if the current bull run can sustain.
But economic theories generally remind us that, in scenario like this, the situation hinges on whether the Japanese Yen will strengthen, and how soon.
If the Japanese Yen goes up against the ringgit, the hedge funds which bought into Malaysian stocks will start to lose money. The faster the Japanese Yen goes up, the faster will these hedge funds throw out their positions denominated in ringgit.
We have seen this happen before.
Original report in Oriental Daily News (Feb 9):
MIMB投資銀行研究經理馮庭秀表示，大馬股市未來的走勢主要胥視匯市的狀況而定，尤其是日圓走勢。
他透露，在過去3個月，看到有相當大數目的避險基金開始進入大馬股市，而這些基金通常都在日本借錢(因為日本的利率非常低)，然後把日圓轉換成令吉，再買入以令吉為基礎的資產。
因此，在令吉走強，以及股市飆升的情況下，這些避險基金將享有雙重獲利。
不過，最為關鍵的問題是日圓會否轉強，馮庭秀指出，如果日圓上漲，這代表投入馬股的避險基金將開始虧錢；更甚的是，若日圓快速走強，這些避險基金將會拋售以令吉計價的資產。
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Jeffrey
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Posting #16: Sun Feb 11th, 2007 03:53 |
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Lifted from here:-
http://elanortan.blogspot.com/2007/02/lies-damned-lies-and-very-silly-usage.html
February 2007
Lies, Damned Lies and (silly usage of) Statistics
The front page of one of our English newspaper today demonstrated how much they do not know about economics. Jeff Ooi blogged about it here. I am less suspicious of their intention – sentiment of the current state of the economy is currently going through a sort of reversal (check out our sentiment indices), at least in the mind of international portfolio investors. No harm in running an article on this issue I guess.
However, the usage of statistics is just so wrong. Way wrong. Not the cunning spinning kind of wrong, but just silly unprofessional kind of wrong. It reflects really badly on our level of maturity in economics and financial matters.
Per capita Income?
Discussing all the statistics will take the whole day, so let me just talk about per capita income. It was stated –
Per capita income: RM12,079 (1998) >> RM18,039 (2005)
The appropriate reaction that you should have now is “so”? It doesn’t really tell you anything besides that our nominal income increased after 7 years, which is really what you should expect anyway. If it remains constant, with rising cost of living, you should really really be worried.
More meaningful statistics will attempt to convey how much income has increased. Contrasting income levels in 1996 (which is a better year to use, since 1998 is what we would label a shock, an outlier, i.e. bad comparator) and 2005:
From RM 11,400 (1996) >> RM18,000 (2005), that is, an average yearly growth of 5.2%, which is respectable.
Now, does this remain if we convert the value into US dollar?
From USD 4,500 (1996) >> RM 4,800 (2005), that is, an average yearly growth of 0.5%. This means that our income grew by less than 1% a year when calculated in US dollar.
The next question we should ask is how we compare with other countries in the region. Did our income grow faster than, say, Singapore or China (incidentally, for the same period, the answer is a marginal yes, and a huge no)?
Anyway, the bottom line is that the statistics printed are basically meaningless.
Comment:- Ahem, amen.
Last edited on Sun Feb 11th, 2007 03:56 by Jeffrey
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investbullbear
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Posting #17: Wed Feb 14th, 2007 09:30 |
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I am interested to learn about the PE of the whole Malaysian stock market. This figure is regularly available to i-Cap subscribers.
How is this figure derived?
What are the comparable PEs of the regional stock markets?
Regarding the sustainability of a stock, sector or whole market, the general concept is that changes in prices not related to earnings are unlikely to sustain for long.
How can the PE of the whole market guide us in our investing?
TQ
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Moolah
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Posting #18: Wed Feb 14th, 2007 09:53 |
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investbullbear wrote: I am interested to learn about the PE of the whole Malaysian stock market. This figure is regularly available to i-Cap subscribers.
How is this figure derived?
What are the comparable PEs of the regional stock markets?
Regarding the sustainability of a stock, sector or whole market, the general concept is that changes in prices not related to earnings are unlikely to sustain for long.
How can the PE of the whole market guide us in our investing?
TQ
Hi there,
I believe this strategy is ulra difficult.
PE as itself is complex. PE in itself looks rather simple. Price Earnings multiple.
Earnings can be based on 3 methods.
1. Past fiscal year earnings. Danger too far back.
2. Current earnings or trailing twelve months earnings. This is more of a as it is kinda measurement but profoundly a company is only worth what it can earn in the future. Hence, basing on current earnings, one is still valuing a company based on its 'past'
3. Projections. This is the better method, but then earnings projection is rather difficult esp when one includes the boom/bust cycles. You project it too optmisticly, then u are getting a too far fetched value.
And last but not least Price. Price is ever so dynamic. It changes all the time. Each day, each hour, each second.
So what's the PE of the whole market? Can one ever come up with a relatively accurate gauge? And with the pricing changes every second of the trading day.. how?
like i said... ultra difficult in my opinion.
rgds
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investbullbear
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Posting #19: Wed Feb 14th, 2007 10:03 |
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Moolah wrote: investbullbear wrote: I am interested to learn about the PE of the whole Malaysian stock market. This figure is regularly available to i-Cap subscribers.
How is this figure derived?
What are the comparable PEs of the regional stock markets?
Regarding the sustainability of a stock, sector or whole market, the general concept is that changes in prices not related to earnings are unlikely to sustain for long.
How can the PE of the whole market guide us in our investing?
TQ
Hi there,
I believe this strategy is ulra difficult.
PE as itself is complex. PE in itself looks rather simple. Price Earnings multiple.
Earnings can be based on 3 methods.
1. Past fiscal year earnings. Danger too far back.
2. Current earnings or trailing twelve months earnings. This is more of a as it is kinda measurement but profoundly a company is only worth what it can earn in the future. Hence, basing on current earnings, one is still valuing a company based on its 'past'
3. Projections. This is the better method, but then earnings projection is rather difficult esp when one includes the boom/bust cycles. You project it too optmisticly, then u are getting a too far fetched value.
And last but not least Price. Price is ever so dynamic. It changes all the time. Each day, each hour, each second.
So what's the PE of the whole market? Can one ever come up with a relatively accurate gauge? And with the pricing changes every second of the trading day.. how?
like i said... ultra difficult in my opinion.
rgds
PE of the whole market will be useful as a guide to certain investors.
For example,
if the overall market PE is 20, the earning yield of the market is 5%.
if the overall market PE is 15, the earning yield of the market is 6+%.
It is comparatively harder to find good bargains i.e. stocks with great returns in an overall market that has a high PE. What is your opinion?
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Moolah
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Posting #20: Wed Feb 14th, 2007 10:16 |
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PE of the whole market will be useful as a guide to certain investors.
For example,
if the overall market PE is 20, the earning yield of the market is 5%.
if the overall market PE is 15, the earning yield of the market is 6+%.
It is comparatively harder to find good bargains i.e. stocks with great returns in an overall market that has a high PE. What is your opinion?
Hello again.
You see I would agree so much with you with what you had posted. I really do.
However, as I have mentioned, the interpretation and the data itself is part of the issue. Let's not talk earnings and focus on the issue of the P in this equation. P or Price is forever so dynamic.
Which price reference would you suggest to use as the indicator?
rgds
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