Fitch Ratings downgrades Malaysia outlook from "stable" to "negative"

Fitch downgrades Malaysia's outlook to negative.

Hey people!

(Kindly take note that my views here are merely educational and it has NO Political undertone nor am I representing a specific political agenda)

A gradual problem that was on the back of unexplained national debts thus leading to Fitch downgrade of M'sia public debt ratings.

Key Heads of M'sian Gov must explain and be prompted to review what fundamentals they had employed and from which school of thoughts they base their decisions on in the past 1-2 years or since 2009.

Here is the real reason you don't get to read from our main stream newspapers.

"1 Malaysia Development Bhd (1MDB).

This 1MDB is still involve actively and it has move US$1 billion (in 2009) to an investment in a Bristish Virgin Island 'entity'. No one knows until today for what the real reasons was for our nations wealth to be moved in such huge sum!!!!!

Now is already 4 years later, and this 1MDB has build up borrowings (debts) of MORE than US$11.97BILLION (yes RM 39billion). In the last 18 months 1MDB racked up (another) closed to US$ 9.4billion  in new debts. It is still bidding for new power generation projects and question is who are really behind these massive debts!

Where are the returns from such borrowings? They claimed that assets has increased but then why has borrowings keep increasing!!

These assets was supposedly in Cayman Island investing in "properties", power generation assets, plants of which does not yield cash flows or income to repay its debts.

Do take note that no other Southeast Asia government back investment arm has accumulated such sickening national debts till to date. Yes none at all.

This is why Fitch downgraded M'sia and also the other reason is that M'sia foreign reserved has also shrunk. M'sia ratio of debt-to-GDP is the main point Fitch is very concern 53%. The torn here is that anything close to 49%, an entity is 'considered' bankrupt.

Malaysia Gov of the day must fix the problem ASAP.

So now our main question in our mind is the following:-

1. Switch away from high Beta funds

2. Cut losses of funds Beta with a negative return in the last 3years.

4. Manage risk basing on Beta's and if you have a high RISK appetite go for Beta above '1' as they then to outperform their benchmark once market rebound.

So actually it's a fundamentally poor decision by Gov of the day. It is not and is the least of a weakening outlook of local economy.

Do not worry yourself sick as there'll b no collapse  in KLSE like what is claimed by certain quarters.

So till then!