Sunday, June 26, 2011

Why invest in Malaysia?

Ever since my feature was out, forumers have been debating if Malaysia is a better bet as compared to Singapore real estate? With all due respect, I think if I have the cash, I would invest in Singapore as compared to Malaysia. As land is scarce in Singapore, there will always be demand for reasonable price property. But due to constant Singapore Government intervention, the rich gets richer while the middle class stays put. So, the only way to get out from that category is by investing elsewhere. I am not going to debate why property is better than shares, cause I failed at shares. I did invest in shares for a brief moment but I can never understand why it went up on certain days and drop the next minute. It was beyond my control. I broke even in my shares trading.

Now, why Malaysia?

1. Strong Singapore currency.

Having a strong currency is an advantage as we (Singapore earners) can easily secure a nice condo in a prime area at half the price. But then again, the shortcoming would be further depreciation of RM against SGD, making the conversion no longer attractive. Unless you have some local business in Malaysia to offset against your income. Else enter into a hedge, again not feasible when your cash flow is minimal.

2. Proximity.

Would you invest in Indonesia? Thailand? Vietnam? Or even US? If you don’t see yourself investing in such country, so apart from Singapore, where else can you invest? Malaysia is just a ride/fly away. Besides that, let us analyse the potential country to invest internationally. Starting from the west to east.

- United States
Plenty of foreclosure, time to load up the property, but massive subprime debt, distance a problem, no leverage avenue for foreigners.

- Canada
No data

- Europe
Same as United Stated

- Africa
No data

- Middle East
Dare to invest in Middle East? Not me.

- China/Hong Kong
Overheating prices, worst than Singapore, dare to go in now? Currency control measure, currency fluctuation, language barrier (for me, I can’t read Chinese), not familiar with local legislation.

- Thailand/Vietnam/Indonesia/Philippine/ Myanmar
Underdeveloped countries, politic instability, chances of currency control is even higher, they have yet to get their fundamentals right where the basic infrastructure and human needs are yet to be met. The gap between the rich and poor is too wide.

- Malaysia
Government a bit screw up, but still acceptable. ETP plans, upcoming MRT line within Greater KL, possible high speed train from KL to Singapore. Once this high speed train is made possible, connectivity makes easy. Similar to Hong Kong MTR that connects to Shenzhen, bringing vast business opportunity between both country. Singapore can only grow at a certain extent due to its size, it’s economy has to expand beyond its own backyard. The tipping point for Iskandar Johor, KL and Singapore is the high speed train, then we will be known as a Mega Region as popularised by Mr Ho Chin Soon.

3. Population growth
While Malaysia is hit with high percentage of brain drain, we still have locals from the remaining 11 states to fill in the vacancy in KL. At the moment, the population of people in KL itself is 7.2million (quoted from Tim Murphy, Buying Asia), which equals the population of whole Singapore.

So, where would you invest now apart from Singapore?


Calvin said...

I am a Singaporean staying in Malaysia and I am heavily invested in Malaysia. I actually like the property fundamentals in Malaysia more than Singapore. Good luck with investing in Malaysia. An alternative investment you can look at is Investing In Dividend Stocks.

You can visit my website at