Finance minister Lim Guan Eng was reported in Channel News Asia as saying he hoped for a “boring democracy” to deploy the US$7.5 billion (RM33 billion) reparation packet bound for the country.
This is excellent news for would-be investors coming back to a level playing field and less uncertainty. Now is the time to strike the hammer on investments.
The question is, what do some of these investment considerations look like?
Trusting government bonds
With Malaysia’s finance minister hoping for a boring state of affairs, it makes sense to look at the bonds market. There is a hugely diverse number of bonds available now, and the Islamic green bond (or sukuk) has proven fruitful, raising US$1.42 billion in funds already.
While some investors may balk at the idea of tying-up funds for many years, the returns are lucrative. According to some money experts, bonds can pay as high as 9%.
Strong fundamentals and the easing of economic uncertainties makes bonds attractive to investors.
This is further supported by ample domestic liquidity and real money demand. For individuals, if you do require extra funds in the interim for valid reasons, personal loans and other credit options are an option.
Risks will be on global oil price movements due to Malaysia’s reliance on oil revenue, and a potential higher net supply of government bonds in 1H19.
The construction industry
Construction and real estate is one of the biggest investment markets globally.
For the past year, this has not been the case in Malaysia as the new administration reviewed mega projects, and Budget 2019 saw a cut in development expenditure.
Overall, the construction sector in Malaysia is expected to continue to contribute positively to Malaysia’s GDP.
Seizing the fintech industry saplings
Malaysia has long been a leader in regional finance and especially Islamic finance. This has not led to a similarly strong showing in the fintech arena.
The lack of recent growth can make this an attractive proposition to investors. Fintechnews.my noted that there was now a few dozen fintech start-ups catered directly to Islamic finance, with strong attention from industry leaders from the UAE.
It’s a case of when, rather than if the fintech wave starts to grow; it makes sense to get ahead of the tide.
Financial institutions will continue to innovate for costs savings and efficiency gains. Traditional financial services will continue to be disrupted.
Malaysia as a leading hub for global Islamic finance is poised to drive innovative developments in Islamic finance in a sustainable manner. With a sense of relative calm, now is the time to start investing in Malaysia.
Growth in multiple industries is on the horizon, and as a result a smart investor stands to make gains.
Consider your position today.
This article first appeared in https://mypf.my
MyPF is on a mission to help simplify and grow Malaysians’ personal finances through financial education.