Malaysia to outperform in tough first quarter 2012, says Goldman

by **hlk** Sat 03 Dec 2011, 00:55

KUALA LUMPUR: Malaysia is expected to outperform in a tough first quarter next year against the expected downside for the region, Goldman Sachs said.

The international investment bank said Malaysia was seen as a safe haven given the uncertain global economic environment.

However, overall, it expects the country to underperform next year.

“We find the Malaysian market is least sensitive to growth factors across Asia,” it said in the Goldman Sachs Global Economics, Commodities and Strategy Research on 2012 Outlook.

It said the Government's initiatives to boost investments via the Economic Transformation Programme (ETP) continued to gain momentum as reflected in the rising public and private investments.

“We believe investors are not yet fully aware of the economic potentials from these efforts and this investible gap' constitutes an attractive opportunity,” it said.

Goldman Sachs also said the banking industry would be a good proxy for Malaysia's defensive domestic demand and with huge captive onshore capital, not withstanding its moderate non-performing loan risks.

It expects the ETP to mitigate some potential downside risks to the sector next year, with more private sector involvement.

Goldman Sachs said it had classified the Malaysian market outlook to overweight.

Earnings growth and contribution to growth would be primarily propelled by domestic demand sectors, spanning from consumer staples and plantation stocks to gaming and hotel operators, it added. Bernama