Bank Negara Malaysia recently raised its overnight policy rate (OPR) by 0.25% to 3.25%.
At the same time, US Federal Reserve had been on track to end Quantitative Easing (QE) program on October (source)
It might be the signal that an era of cheap credit to support quick recovery of the economy following world financial crisis at 2008 will end soon. This also mean that, a period of inflated properties and shares price may end soon, where the growth of properties price and share price will likely return to normal level.
It could be an pre-emptive measure by BNM to contain the Malaysia's Household Debt which had reached 86.8% of GDP in 2013 (source). Rising OPR will increase cost of borrowing for existing fixed-rate mortgage taker and new mortgage taker. This might prompt a de-leverage exercise for some of the heavily in-debt house owners, thus depressing the property price down for a while.
Depending on how serious BNM is in raising OPR further, the economy might be slow down for one year or two, before picking up its normal pace again after the adjustment period for the OPR hike effect.
Which mean, the wiser actions for now seem to be
i. Sell gold
ii. Stay from properties and stock markets unless there is good bargain
iii. Keep cash.
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