Economic Outlook
Asian markets still seemingly uncertain as investors remained pessimist towards the market situation. Strong headwind arisen from external environment will directly affect Asia economy activities especially cross-border mergers and acquisition activities.
The local market came under pressure in line with the generally negative sentiment in most regional markets brought on by rising fears that Europe’s sovereign debt situation may worsen. In other words, it will moderate the flow of foreign investment and slowing down of economy growth. We are still in for tough times because both the EU and the US will NOT take in imports as they did in the boom. Thus, an exporting nation will be in a trouble for a while and also tight in credit around the world will eventually making the small business to suffer.
With countries including Greece, Portugal, Spain and Italy imposing austerity measures to bring their debt levels under control, it is likely that economic growth will falter given the already low economic growth rates over the past years. As such, these countries are finding themselves caught between a rock and a hard place. If they stimulate the economy to avoid recession, they would risk facing higher debt level and rising bond yield as investors flee, but if they tighten their budgets to cut debts, they run the risk of their economies.
Therefore most of us will expect 2012 to be a year of uncertainty and thus foresee Malaysia GDP growth performance between 4.0 to 4.6 percent due to significant slowing down in export performance. Perhaps buy commodity stocks or wait for the US and EU prints money?
