According to UOB Kay Hian analyst, the wood based panel makers, eg. Evergreen and Hevea etc, will also be the beneficiaries as 10% trade tariff will also be imposed on wood based panel exported from China to US, if the tariff really come into effect in end Aug'18. I suppose that explains why LiiHen, Pohuat,Evergreen & Hevea stock prices all shot up today. TheStar just published UOB Kay Hian's analysis today.
The strengthening of USD and the potential 10% tariff on China imports would provide Malaysia wood based manufacturers a big boost for their stock price to run from now till Aug, I think.
Just that, Furniture need to deal with the cost hike of raw materials eg. Rubber wood and Coating & Chemical products . Production curve line / scale & Technology know how manufacturing that may be the only way to mitigate it .
Chinese government is very good. They have a lot of ammunition. They have already devalued their currency from 6.3 to 6.8 for 1 USD. Deprecated more than the RM.
Trade war may lead to stagflation. Consumers may hold back spending on durable goods. It may not be all that rosy when it pan out. When China goes down, don't think others can prosper.. hihi
Furniture is labour intensive and the impending implementation of the min wages in Malaysia, how does it affect the competitiveness unless the company has factories in Vietnam or other 3rd world countries...
Risk assets and oil prices would likely tumble as worries about growth arise, hitting currencies of commodity-exporting countries particularly hard -- namely, the Russian ruble, Colombian peso and Malaysian ringgit -- before taking down the rest of Asia.
When trade War escalates, everything will tumble together... Stagflation, depression like that of the 1930s? Scary... Seems history could repeat itself..
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New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
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Fabien Extraordinaire
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Posted by Fabien Extraordinaire > 2018-07-20 16:31 | Report Abuse
with or without trade war, outlook for furniture industry is promising given the strength of US economy and the hurricanes. this trade war is a bonus.