Malaysia Business Forecast Q1 2007

Content

• Chapter 1: Political Outlook
  • BMI Core Scenario
  • Malaysia's ruling UMNO party faces an increasing challenge from resurgent opposition parties, although
  • tangible successes in Prime Minister Abdullah's reform agenda should strengthen his grip on power
  • SWOT Analysis
  • BMI Political Risk Ratings
  • Domestic Politics
  • Not An Election Budget
  • While Prime Minister Abdullah Ahmad Badawi's latest budget contains some short-term pleasers, particularly
  • for the construction industry, we do not believe that this is an election budget We expect Badawi to receive
  • the backing of the UMNO assembly in November, which will end the election speculation caused by Mahathir
  • Mohamed's criticism
  • Systematically Marginalised?
  • Accusations from Singapore's former-prime minister Lee Kuan Yew that Malaysia has marginalised its ethnic
  • Chinese are largely unsupported by economic evidence That said, the business success of the ethnic Chinese
  • has been achieved in spite of exclusion from the political realm
  • Table: Key Ministers
  • Malaysia's economy will continue to rest on the key pillars of openness and industrial growth So long as the
  • government does not ditch its past commitment to economic liberalism, inward investment will keep flowing
• Chapter 2: Economic Outlook
  • BMI Core Scenario
  • SWOT Analysis
  • BMI Economic Risk Ratings
  • Introduction
  • Economic Activity - Short- and Long-Term Doubts
  • Economic Activity
  • Moderate Slowdown Ahead
  • Malaysia's economy is set to slow in H206 as the global economy slows and as higher interest rates weigh
  • on consumer demand We expect this weakness to persist into 2007, although an anticipated rate cut could
  • provide some relief
  • Table: GDP, Output & Population
  • Exchange Rate Outlook
  • Riding Out Short-Term Pressure
  • Despite the ringgit experiencing some short-term pressure, Malaysia's macroeconomic fundamentals remain
  • strong, which will support our view that the ringgit will appreciate over the coming quarters
  • Table: Exchange Rates
  • Monetary Policy
  • Rates Staying Put
  • Inflationary pressures have eased over the past few months, allowing the central bank to switch its focus
  • towards supporting growth While this means further rate hikes are unlikely, we do not expect a cut until well
  • into 2007
  • Table: Monetary Policy
• Chapter 3: Special Report
  • BMI Sovereign Risk Ratings
  • What And Where Are The Risks?
  • Table: BMI Sovereign RIsk Ratings
  • Asia
  • Rising Political Risks A Constraint
  • Table: Asia Sovereign Ratings - Evolution of Ability to Pay
  • Table: Asia Sovereign Ratings - Evolution of Willingness to Pay
• Chapter 4: Business Environment
  • BMI Core Scenario
  • Malaysia has one of the most open, investment-friendly economies in South East Asia Corruption is improving
  • and there are few regulations for new businesses, although the number of foreign contracts available may be falling
  • SWOT Analysis
  • BMI Business Environment Risk Ratings
  • Legal Framework
  • Labour Force
  • Table: Demographic Indicators (2005)
  • Table: Employment Indicators
  • Foreign Investment Policy
  • Table: Asia, Annual FDI Inflows
  • Table: Malaysia, Annual FDI Inflows
  • Foreign Trade Regime
  • Table: Top Export Destinations, US$mn
  • Tax Regime
• Chapter 5: Key Sectors
  • Retail
  • Market Overview
  • BMI is forecasting sales growth of 424% in Malaysia's MGR sector over the forecast period to 2010
  • Sales are predicted to reach US$44bn in 2010 which, despite representing an attractive opportunity to retailers, is short of the growth predicted in many of Malaysia's neighbouring markets
  • Food & Drink
  • Industry Forecast Scenario
  • Table: Food Consumption Indicators - Historical Data & Forecasts
  • Telecommunications
  • Market Overview
  • BMI projects that mobile phone penetration in Malaysia will pass the 90% mark during 2009, and that by
  • the end of 2010, there will be in excess of 25mn mobile subscribers
  • Table: Malaysian Telecoms Sector - Internet - Historical Data & Forecasts