GLCs to STOP Foreign Assets Buying?

To contain the strong capital outflow and depreciating of Ringgit, MOF had finally taken some actions.

Malaysian government-linked firms asked to stop buying foreign assets

6 Jan 2015

"KUALA LUMPUR (Jan 6): Malaysia's finance ministry has asked government-linked companies (GLCs) and statutory bodies to temporarily halt purchases of foreign assets, in response to falling commodity prices and in a bid to contain capital outflows. The ministry confirmed that a circular signed by the treasury's secretary-general on Dec. 26 was a move to boost domestic consumption. In an email response to Reuters, the ministry said that the entities were "requested to give priority to domestic investment activity and postpone or put on hold, purchase of assets or investment abroad" "

On the other hand....

EPF to raise overseas exposure to 26% in 3 years

10 Feb 2015

"KUALA LUMPUR: To generate more consistent returns in the long term, the Employees Provident Fund (EPF) is looking to increase its overseas exposure to 26% of the fund’s total investment assets within the next three years, according to chief executive officer Datuk Shahril Ridza Ridzuan.  “At 23% [present], we plan to move [it up] to 26% over the next three years. So we are looking at adding on about 1% every year,” he told a briefing on the EPF’s 2014 investment results yesterday. The growth in foreign assets, added Shahril, will come from fixed income, equities and real estate."

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(Source: Financial Daily The Edge)

Doubt if GLCs are taking the orders seriously.

[Economics] Economic Outlook Snapshot for 2015

Malaysia 2015 Outlook

• In light of the weaker growth prospects, another interest rate hike this year is off the cards, even in the face of a weaker currency.
• Domestic demand and ETP will remain prime mover of growth.
• Exports to benefit from global recovery especially given lower oil prices.
• Fiscal reforms and subsidy cuts underway to rein in budget deficit and debt.

Global 2015 Outlook

• The global economy enters 2015 on mixed footing. In the US, where growth is starting to look good, there are questions about slack in the labour market, the outlook on inflation and when policy rates are likely to rise.
• Growth rates are expected to go up in the US and possibly Japan, but China will remain slow. European growth is unlikely to deviate much from the pace in 2014.
• There is potential policy rates rise in the US but China to implement further cuts. The European Central Bank will start buying sovereign debt and Japan goes even more turbo on quantitative easing.

(Source: Various research reports and news portal)