irenMalaysia, a pearl in emerging market.

Not long ago, investors finding the most suitable developed country to invest, and now the same scene moved to the emerging markets. Malaysia show the attraction while misgiving in almost emerging market.

International Monetary Fund (IMF) reduce their expectation growth toward emerging market to 0.3%, verify the suggestion of most investor: new emerging market is no longer the safety investment target. China is slowing down their economic, IMF expected to revised the percentage from 8.1% to 7.8%. Under the sluggish economic growth in Brazil, Central Bank still hope to control market pricing by increased of interest rates, to ease public fiery temper. Remains as ever for Russia.

Also no much optimism for small economies, Latin origin of bulk raw material Peru, Chile stock market fell 30% and 21%. Investor believe that slowdown of China economic will drop the demand of copper and iron. Raised of interest rates for Bank Indonesia last Thursday (the 11^th), narrowed the return rate gap. While the Philippine’s stock seems too expensive. Turkey has recently suffered a 15% decline in stock market, the Government is investigating what role played by financial institutions within recent protests.

Ben Levisohn analyzed that Malaysia is obviously the best choice among the emerging market.

Although Malaysia’s GDP only growth of 4.1% in the first quarter, weaker than Indonesia (6.2%) and Philippines (7.8%), but Malaysia has a good performance, only country which have continuous 3 month rising among Southeast Asian stock market. iShares MSCI Malaysia Index Fund rose of 2.3%, but Indonesia, Philippine Thailand and others market’s ETF are drop about 10%.

One of the impetus for Malaysia growing is because last year don’t have a crazy soaring such as Philippines and Thailand. iShare MSCI Index Fund has rose 15% in last year, but iShare MSCI Philippines Index Fund is its three-fold.

Followed by the election result. Investor worried that government loss of power will shut down the country’s economic reform. But when Prime Minister Najib Razak reelected consecutively, result is welcomed by investors.

Election results for those companies that will benefit from the ruling party policy is beneficial. National Energy Company (Tenaga Nasional) (5347-MY) has risen 25% in this year. The government will enable the company to add on raw material cost to consumer in next year. Some fund manager optimistic about this company, and think that the past 12 month average increase by 11.1 times is quite low.

And said that there is no reason people not optimistic about Malaysia market. Neil Leeson- Strategist for Ned Davis Research Company pointed out, when most intense of iShare Malaysia Index Fund at last time, there are 45% stocks in the low point for 30 days. But now has 20% stocks climbed to high point in 30 days. According technical indicator design by Ned Davis also show that within next 12 months, the Malaysia stock market will rise an average of 17%.

#cnYES 20130715#