Fitch’s reaffirmation shows fiscal reforms on right track

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Fitch affirmed Malaysia’s Long-Term Foreign- and Local-Currency Issuer Default Ratings at ‘A-’ and ‘A’, respectively, with stable outlooks.

Fitch affirmed Malaysia’s Long-Term Foreign- and Local-Currency Issuer Default Ratings at ‘A-’ and ‘A’, respectively, with stable outlooks.

KUALA LUMPUR: The reaffirmation of a stable outlook for Malaysia by Fitch Ratings is evidence that the global rating agency approves of the fiscal reforms undertaken by the Malaysian government.

“It reaffirms that all the measures, such as the recalibration of the 2016 Budget, are not that bad.

“Reaffirmation by Fitch Ratings is good because it reaffirms that Malaysia’s economy is on the right track,” said Kenanga Investors Bhd executive director/chief executive officer Ismitz Matthew De Alwis after launching ‘CareTRUST’, a new retirement investment solution, here yesterday.

“Last year we projected 4.9 per cent for Malaysia’s Gross Domestic Product (GDP) growth, but we ended up closing the year at five per cent, which was a great result.

“Then recently the Employees Provident Fund declared a 6.4 per cent dividend for 2015, which was also excellent.

“All this news will do a lot of good for us. As a fund manager, we welcome the good news, which has been lacking,” he added.

On Bursa Malaysia’s performance, De Alwis said there would tend to be some investment opportunities when the market is making a correction.

“There are bound to be values somewhere. We expect the market to pick up in the second half of the year,” he said, noting that there are signs the ringgit is slowly strengthening.

“With Fitch’s rating, it’s helping a lot. But a quick hike is not good as some export sectors benefit from a weaker rate.

“Thus we are now at a better phase, and slowly but surely the ringgit will reach its fair value,” he said, adding levels of 3.90 to 4.1 (against the US dollar) are a good range to look at.

On Tuesday, Fitch affirmed Malaysia’s Long-Term Foreign- and Local-Currency Issuer Default Ratings at ‘A-’ and ‘A’, respectively, with stable outlooks.

The stable outlooks reflect Fitch’s assessment that the upside and downside risks to the ratings are broadly balanced. — Bernama