While there are signs that the worst could be over for the US financial crisis, local fund managers are still cautious on the capital markets and the global economy.
According to Areca Capital Sdn Bhd chief executive officer Danny Wong, sentiment is “off bottom” but yet to turn bullish.
“There are some good indicators such as the slight rebound in US housing starts and the recent proposal for public-private partnerships (PPP) to tackle the toxic assets in the financial system. The PPP is a good move to renew confidence,” he told StarBiz in a telephone interview.
Wong, however, is not jumping into the local market just yet.
“We need to see a support level (for Malaysia) such as improving industrial production index and export figures. Once the US recovers and China starts to pump prime its economy, would these support our exports?” he said.
In addition, the real impact of the global crisis has yet to be visible on businesses and company earnings.
“If the impact is within or below expectations, sentiment will definitely improve. If the impact is above expectations, there may be more downside pressure,” Wong said, adding that on the bright side, Malaysian banks were raising their capital adequacy ratio.
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