Monday, January 19, 2009

Political uncertainties not a factor in Bursa

You've got to listen to Mark Mobius when he says something. He's been in charge of Templeton Asset Management for Asia's emerging markets for quite a while. He's usually very candid because he manages a huge investment fund. Close to US$30 billion (RM108 billion) in assets.

So, this time around, Mark Mobius has made the observation as reported in the Edge Daily, that against the backdrop of a volatile trading environment and global economic downturn, the Malaysian market presented investment opportunities because of attractive valuations and its steadiness compared with other markets.

"The Malaysian stock market has not gone up as much as other emerging markets in general. Neither has it gone down as much, so the market tends to be steadier in that sense," he is quoted as saying.

Mobius also said that the political uncertainties in the country would not have a significant impact on the stock market.

He observed that the government institutions are in place and it will continue to operate no matter who is in power. He reckoned that the market will take a life of its own. He was of the view that share valuations in many cases in Malaysia are attractive so there are opportunities to come in, buy and invest.

Now that's a qualified thumbs-up for Malaysia from Mobius.

But, we cannot overlook the fact that Templeton has had some discomfitting exposure to Satyam, the Indian IT outsourcing company which is mired in a financial scandal which may account for Mobius's unusually generous comments about Malaysia. Usually he's not that generous.

Still, if Mark Mobius is correct in saying that politics is not a factor that drives the market sentiment at Bursa Malaysia then, what does drive the recent negative sentiment?

Could the negative market sentiment possibly have a probable link to the putrefying state of the real economy?

Just, maybe?


satD said...

Hihi Bro de minimis

How u been of late?

Have to disagree with the Kojak wannabe, political certainty is one of the most important aspect for medium to long term investment...

But maybe he is thinking of only 6 months horizon and he could be short?

Major funds left in the 1st Quarter of 2008 and have not come back.....Malaysia is outside the radar of portfolio flow.

We do not have a story to tell anymore as how Kuli mentions in his speech at ASLI.

What we have is a government who is unclear of what would our competitive position be in the global flow of portfolio investments.

On top of it, we got a bunch of incompetent bureaucrats running the demutualized bursa....makan gaji bute, how can this build the right confidence of a market that is up to global standards?

I pray that there is no major accounting fraud cased involving any of our blue-chips....then we're knocked out for good

de minimis said...

Bro satD

I share your sentiments.