As an investor in Malaysia, the recent three factors that may affect my investment decision are - GST implementation, Ringgit depreciation, and oil price drop. In this post, I am going to summarize my opinion, particularly, trying to figure out potential opportunity that may once again maintain or even improve my investment return in the next 1~3 years.
Before that, I would like to re-highlight that every decision or view that stated here is based on present available data and information. If an unforeseen circumstance or event happens, all the strategies and decision (especially for those mid- or long- term plan) must be revised timely to reduce (or hopefully avoid) losses.
Goods and Services Tax (GST) (also known as Value Added Tax) is a consumption based tax charged on all taxable supply of goods. (source: www.gstmalaysia.co/)
Basically, what we can expect is consumers will "store up" any potential item such as electrical appliances and furniture before GST arrives. Thus, we can expect the consumer purchase activities are going to increase before GST; then reduce for months; and lastly back to normal. In other words, for long term investors, GST may have zero effect on their portfolio investment in the long run.
However, this may be a good chance for long term investors to accumulate good shares with some discount, if and only if, Mr Market over reacts.
Ringgit Depreciation - One of factors causes Ringgit depreciation is the reaction of "investors" who predict Green will be strengthen soon due to the recovery of USA.
Besides, Oil Price shrinks is another factor that "investors" believe it may significantly affect Malaysian economy. However, we should know that the income sources of this country is much diversify than last decade.
Ringgit depreciation, on the other hand, could help export-oriented companies or business to be more competitive. Of course, import-oriented companies or business may not get any advantage from this trend.
Oil Price Shrinks - Oil could be one of the vital resources we have in this earth. Oil can be raw materials for many industries to produce goods; oil can be transformed to be energy that can move our vehicles; and so much more. Thus, regardless the fact that causes oil price drops, it is a good news for consumers and some industries who use oil daily.
In short, game rule is changed now! The previous winners will be replaced by new winners. So, what we can do is to position our portfolio accordingly to prepare potential impact and also potential return in the future.
That's all for today. More fascinating articles and sharing will be updated weekly in Xaivier Blog. So, you are welcome to subscribe our feed to receive our weekly updates.
Written by: Xaivier Chia
P/S: The above sharing is solely based on personal insight and information that believed to be reliable. Your valuable feedback are very welcome.