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Thursday, January 30, 2014

Credit Suisse warns investors on global impact


PETALING JAYA: Credit Suisse has told investors to brace for impact following renewed Chinese economic and financial stability concerns, on-going US quantitative easing tapering and Argentina’s peso devaluation.
In a note to investors stating risks to several Asian countries, it said the risk to Malaysia was the country’s high level of foreign bond holdings.
“We still worry about (this) high level,” noted its economists Michael Wan, Robert Prior-Wandesforde and Santitarn Sathirathai in a report yesterday.
However, it also noted that Malaysia, together with the Philippines and Thailand, which were all hit during last year’s mini-crisis, was better placed in most categories.
In the Asia ex-Japan region, compiled data by the research house showed that Malaysia had the highest foreign holdings of government bonds in absolute percentage term at 45.1% presently.
It was also the highest among the emerging countries in data compiled by Credit Suisse.
Meanwhile, on the turn of international economic events recently, Credit Suisse noted that no one yet knew whether it would turn into a “financial storm” similar to what that was witnessed in the May-September period last year, or whether it would be a short-lived squall.
“But, as all good boy scouts know, it’s best to be prepared,” it added further.

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