Malaysia has earned an admirer in BlackRock, Inc., the world’s largest asset manager with over US$3.65 trillion in assets under management.
Malaysia rose three notches on the BlackRock Sovereign Risk Index to 16th place on strong momentum from late 2011, when GDP surprised to the upside. Drawing on a pool of financial data, surveys and political insights, the BlackRock Sovereign Risk Index assesses the government debt of 48 countries.
“Malaysia benefits from strong private consumption and investment growth. Lower short-term debt levels and an upgrade of Malaysia’s projected ability to service its debt improved its Fiscal Space Score”, noted the report by the BlackRock Research Institute.
BlackRock is one of the keystone investors in the listing of IHH Healthcare, the third largest IPO of 2012. Along with the listing of Felda GlobalVentures Holdings, Malaysia lays claim to the second and third largest IPO’s of the year after Facebook.
Developing countries such as China, Brazil, Indonesia, Philippines and Thailand have been put on the defensive in the face of slowing global growth but Malaysia has managed to stand out from the pack by deciding not to cut interest rates this year.
“Right now, our interest rate is very supportive of growth,” said Tan Sri Zeti Akhtar Aziz, Governor of Bank Negara.
“The domestic economy is very strong. Consumption demand, private investment activity is very robust.”
BlackRock has been attracted to Malaysian bonds as they have the highest yield in Southeast Asia after accounting for inflation. The average yield is at 3.44 percent and inflation in Malaysia has slowed to 1.6%, the least in Asia.