The Potential Implications of Trump’s USD1 trillion Infrastructure Fund on Malaysia — Capital Flows Perspective

  1. Tax Revenue
  2. Proceeds from bond issuance
  1. MYR would depreciate against the USD. More demand for USD.
  2. Outflow of funds from local MGS market to T-bills, pushing MGS prices down.
  3. Outflow of funds from local stock market, pushing stock prices down.
  1. If you are holders of MGS and Malaysian stocks, sell all and buy T-bills.
  2. After MGS securities and stocks are at lowered favorable prices, enter back into MGS and stocks.
  3. Take positions in companies with extensive exporting profiles to the US or infrastructure based companies.
  4. Pay close attention to the inflation numbers and BNM’s monetary stance. If BNM is critical in its assessment of inflation, it would be the time to engage in profit taking activities by selling Malaysian stocks and going into the bond markets where yields would be higher if BNM decides to raise interest rates.

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An economist and an investor who is highly interested in the realm of macroeconomics and finance, and how to combine them together

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Ho Su Wei

Ho Su Wei

An economist and an investor who is highly interested in the realm of macroeconomics and finance, and how to combine them together

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