Malaysia’s investment proposition for 2020 appears to be better in 2019. The growth initiatives are clear , as planned in the Budget 2020, with its positive announcement the government is set to take the growth a step further.
Consumers seemingly lacked confidence to spend and businesses appeared reluctant to invest for which has been taken care in the plan for 2020.On the external factor following the signing of the phase one deal the overall sentiments are expected to be balanced.
Growth potential for Malaysia is expected to be strong for 2020, driven by upbeat domestic demand on the back of recovery in other segments likely manufacturing, mining and agriculture.
Trade and investment activities will rebound as the sentiments have improved after a positive breakthrough in US-China trade negotiations. Ringgit is also expected to rebound and a lower base effect and readily-available capacity will push 2020 growth higher at 4.8%.
What Continues To Make Malaysian Market Attractive?
No economy has been spared the impact of US-China trade tensions. Yet the FBM KLCI remains one of the attractive markets to invest. The optimism remains strong as we can observe in the chart that the market has always taken a turn in the month of December and January and continued the rally for a while.
We think opportunities are more likely in the midcap names as valuations suggest that the prices are particularly cheap. FBM KLCI is expected to move 80-100 points from here to reach at 1650 points retracing by 25%.