Malaysia Will Still Be On Investors' Radar: Economist

KUALA LUMPUR, July 29 (Bernama) -- Malaysia will still be on investors' radar due to its stable economic condition, strong aggregate demand and excellent business framework, said International Quality Investments Chief Economist Shan Saeed. The recent downgrade of Petronas' ratings by Fitch Ratings would not materially affect Malaysia’s sovereign credit ratings, added Shan, who had predicted that the benchmark Brent crude oil price would rebound to the US$100 per barrel level by the second quarter of next year. "Economic confidence will keep the Malaysian gross domestic product growth to upsurge in a structured manner. "Foreign and local investors are buying properties in Kuala Lumpur, Penang and Iskandar Johor," said Shan at the Malaysian Alumni Chapter of the University of Chicago, Booth School of Business, United States networking Wednesday. Shan said Malaysia was in a strategic location in the ASEAN region due to the Straits of Malacca. "Eighty per cent of China’s oil supplies pass through the strait. "Malaysia along with Vietnam and the Philippines will be among the top economies in ASEAN in 2016 with higher economic confidence," he said. Fitch Ratings has recently downgraded Petronas' long-term foreign- and local-currency issuer default ratings to 'A-' from 'A'. It expects the company's free cash flows to remain weak, reflecting the expected slow recovery of oil prices, high committed capital expenditure and dividend payments. The international ratings agency also expects the benchmark Brent crude to average at US$33 a barrel this year, and then trend upwards to US$45 a barrel in 2017 and US$55 a barrel in 2018. As of Thursday, Brent was down 10 cents at US$43.37 per barrel in Asia trading session. Shan on the other hand said the energy market outlook was positive and prices would move up in a structured manner. "There is no more (oil) glut in the market. "The premise is very simple. Demand for oil is solid, that is, 93 million barrels per day," he said. Once the oil prices recover, Shan opined that the oil companies, including Petronas, would start making staggering profits as oil and gas are the major requirements for any growth economy. "Malaysia is on the growth path and better than many countries in Europe and South America," he said, adding the rating agencies had been wrong in the last 15 years on many companies/countries globally. -- BERNAMA