Recession in Malaysia in 2018, predicts expert

Tan KW

Publish date: Tue, 22 Aug 2017, 11:29 AM

Professor says all sectors, except the palm oil industry, will be affected by the recession.

PETALING JAYA: Malaysia is likely to be hit by a recession in 2018, with most of the sectors expected to slow down, political and economic affairs analyst Prof Hoo Ke Ping predicts.

However, he said, the palm oil industry would do well due to the La Nina effect which will see more rain than expected, pushing production and prices for the edible oil upwards.

“Malaysians will feel the pinch of recession from next year onwards due to various factors, including a decline in consumer confidence and the retrenchment of workers from such sectors as oil and gas, banking, retail, and electronics,” he told FMT.

“Prices of medium and high-end homes will drop, with property speculators starting to tighten their belts as bank loans become harder to get.”

Hoo pointed out that Malaysians have experienced a recession in almost every decade since the 1960s.

He said in the early 60’s the recession was caused by global rubber prices, and another recession in 1967 was due to the ringgit crash. In 1970, it was caused by global rubber prices while in the 80s, the recession was due to outflow of funds and a property crash.

In the1990s, Malaysians experienced recession again but this time it was due to a currency crash which saw economic growth of -7 per cent, he said.

“In 2008, we experienced another recession but we managed to pull through very quickly. The 2018 recession is expected to hit almost all sectors,” he added.

Hoo also said for those looking to buy a home, the next two-and-half years might be the best time to own a medium to high end property,

This is because the property market had started to show signs of slowing down six months ago after market speculators failed to get bank loans or buyers or tenants for their properties.

He said some of the houses were going for almost RM100,000 cheaper. For instance, he said, a condominium unit that was going for RM500,000 in 2012 was now being sold for RM420,000.

He said property prices had shot up after Bank Negara’s delay in curbing greedy market speculators from buying and selling properties under the Developer Interest Bearing Scheme which exercises the “willing buyer willing seller” concept.

Bank Negara finally imposed stricter regulations on market speculators in 2012. However, he said the delay had caused a property bubble with property prices artificially increased.

Hoo said the “fake demand” had caused more houses to be built. He predicted that about 6,000 houses in the Klang Valley, 3,000 in Johor Bahru and 1,000 in Penang would lie vacant.

To overcome the “fake demand”, he said, Bank Negara should tighten bank loans for developers, forcing them to sell completed properties at a cheaper price. “Most of them built the properties in 2013, when the prices were still inflated. Even if they sell the remainder of their unsold units at a cheaper price, they will still make money.”

http://www.freemalaysiatoday.com/category/nation/2016/05/06/recession-in-malaysia-in-2018-predicts-expert/

Discussions

Be the first to like this. Showing 23 of 23 comments

calvintaneng

Post removed.Why?

2017-08-22 11:47

shortinvestor77

Bullshit again. Now 5.8% GDP in Q2. Prove that economic is better. will see banks performing better. Now also cannot talk realistically, how to talk about future realistically? No body know about. future. If you want, you better prefict how you are young to die and when.

2017-08-22 13:58

914601117

Bigger crash is coming and Malaysia will be main focus in coming crisis.

2017-08-23 00:07

Stock Kingdom

haha, again & again, Calvin keep promoting his plantation stocks nonstop.

2017-08-23 00:11

calvintaneng

Posted by Stock Kingdom > Aug 23, 2017 12:11 AM | Report Abuse

haha, again & again, Calvin keep promoting his plantation stocks nonstop.

YESSS!

Calvin sees tsunami coming

So Flee to the Mountain for safety

PALM OIL STOCKS SAVED THE DAY FOR YEAR 1997/8 DURING ASIAN FINANCIAL CRISIS

IT ALSO SAVED THE DAY DURING SUBPRIME CRISIS OF 2007/8

SO FLEE TO SAFETY

See

https://www.youtube.com/watch?v=3dwpB_SVyj0

2017-08-23 00:17

apolloang

datuk calvin u can promote as u like after ur butaland limit tomoro.....only good tipsters are allow to promote as they like, some without knowledge about stocks wanna talk big and hoo ha.

2017-08-23 00:27

hstha

Economists are good only at analysing the past, not predicting the future,,,

2017-08-23 06:56

tellmewhy

For once SONY CEO said, In recession years hide yourself in the cave

2017-08-23 08:54

enning22

Prof Hoo Ke Ping? WHO IS HE? wide-chicken docterate professor? most of his predictions were proven wrong, and the facts provided here are full of mistakes.

2017-08-23 09:43

Unicorn

Old ppl eat salt more than you eat rice. Be prepared.
Warning already flashing not long ago..
http://www.thestar.com.my/business/business-news/2016/04/02/household-debt-on-the-rise/

2017-08-23 10:18

Unicorn

But sometimes I just want to challenge ppl who calls for crash to buy a lot of index Put Warrants for themselves to show their commitment to what they say.

2017-08-23 10:35

GoodCompanies

No recession in Malaysia anytime soon. This Professor is citing that recession occurred every decade, so one must occur soon. That is wishful thinking.
Most important indicator is population growth, including foreigners. Then investment levels by companies and government.
And GDP is not a measure of everything. For example, the GDP of taxis has dropped, mainly due to cheaper grab or uber in the market. This means economy is good, but GDP shows it is bad. So one must look carefully.
Of course as investors in many bursa companies, it is easy to tell if there is an oncoming recession, just look at the quarterly profits of many companies in many sectors.
Now government and corporations should look more at ex-KL areas, which have good growth potential, and invest there.

2017-08-23 11:11

joetay

@stock kingdom,

and tun @calvintaneng also promoting property stocks as well. if u noticed his statements lately, all r very contradicting. one minute tell us that property developments r booming and next he tell us his tenants not doing well.

do note the contradiction in his statement that f&b counters will be earning less due to weaker purchasing power and higher ingredient costs while pure play cpo counters will be up becos palm prices have not gone up.

if there is no increased demand by end-consumers, how can the price for ingredients go up???

really is the biggest puzzle in i3.

@unicorn,

thats what i always say to fund managers who promote stocks to me. got one lady fund manager telling me to buy pure play crude oil counters early this yr becos of opec cuts, i told her how abt the low cost shale crudes in us???? she cannot answer me and tell me as that costs of shales crudes production ard usd60/bbl, crude oil prices only will go up. i can only just laugh.

2017-08-23 11:11

Unicorn

The best is to invest in sectors you are familiar. For me it is tech sector. Commodities are toughest.

2017-08-23 14:10

calvintaneng

Professor says all sectors, except the palm oil industry, will be affected by the recession.

2017-08-24 01:18

hollandking

Unicorn, do you do research on US tech stocks?

2017-08-24 01:21

Unicorn

Yea, I must do research on US tech stocks to assess the progress of tech sectors as well as making sure they are not overvalued as in dot-com bubble.
The 5 I always keep track : AAPL, GOOG, MSFT, FB & AMZN.

2017-08-24 10:09

enning22

i think ,unicorn prefers eating salt "wishful thinking",provided by older people like wildchicken professor, rather then eating normal rice (own financial research and observations).

2017-08-24 10:50

Unicorn

Spot on! I really like salty food like salty soup, salty fried fish or even salty tomato flavored chips !

2017-08-24 10:54

Unicorn

There is a reason why old people can live that long and why some people just die young. So we must listen to old people.

2017-08-24 10:59

Unicorn

Like dear respected Warren Buffett and Koon Yew Yin.

2017-08-24 11:00

Junichiro

Recession would probably come after the completion of TRX. Wahid said the project would go on regardless of the economy. U can google and see the correlation with recession and skyscrapers.

2017-08-24 20:15

Cockcroach

This news was in May 2016 lah. Economy landscape has changed since then

2017-08-24 20:25

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