The year 2018 has been tumultuous for Malaysia and the world. I am often surprised by people complaining about how Malaysia has not improved even after a new government change in May.
First, it’s only been six months since the elections to make such evaluations. Even if you are starting a new job as CEO, is it possible to turn the company around in six months? Can you sack every employee and replace them overnight with a new staff? Surely that is a ridiculous notion!
Second, with the revelation that the country’s finances are in the pits, the new government has limited options in dishing out goodies and incentives to spur the economy.
It is practically banking on its reputation to entice foreign investors with promises of being business-friendly.
Would the country or people have fared better if the previous government had won? There is no guarantee of that. With the election over, it need not work so hard to be popular for another five years.
Taxes could have been raised; incentives could be cut, but, who knows, many more mega loans for mega projects would be undertaken, putting the country at greater risk than now.
If we think things are bad now, it could be a lot worse had the status quo been maintained.
Third, the world is going through an economic roller coaster, thanks to the volatile US President Donald Trump. His trade war against China has thrown the regional supply-chain in chaos.
The tit-for-tat tariff war will create a surplus in soybeans which can depress palm oil prices while his fight against North Korea heightened fears of conflict for a brief moment in time. To make matters worse is his beef with Iran also caused oil prices to spike and then drop.
These events are beyond Malaysia’s control. If anything, our country hogged unflattering headlines through the 1MDB scandal.
The US Department of Justice’s actions against the alleged misappropriation of funds and the possibility of massive punishment on Goldman Sachs is believed to have caused stock markets to tumble.
How does that bode for Malaysia in 2019?
We are likely to experience a continuation of these conditions next year. Presently, property developers and investors are finding it tough to drum up businesses. They are offering special promotions, discounts and fee waivers to entice buyers.
The economic uncertainty weighs heavily on the career prospects of potential buyers, and they are reluctant to take on the financial risk of purchasing a new home. Banks are also cautious and choosy about who they want to lend money.
Next year, contrary to popular belief, is the year of the wooden boar, not earthen.
It is a conducive period for wood-, water- and fire-related industries. It should indicate that the property and construction sectors should do well.
However, other formulas that are used for forecasting the new year indicate that 2019 – and 2018, for that matter – will not be smooth sailing for the economy. It waters down or dampens the positive effect of the year’s Wood element.
The property market will likely stay at present levels. The sub-sales market may see a pick up as property developers and investors look to sell off their inventory.
Developers may also opt for smaller, more modest projects in the coming year to keep themselves busy.
Next year will be a very wet year, and plenty of floods is expected to happen. That will affect not only the agricultural output but also the construction industry. Work is disrupted when it rains, and the company has to contend with overflowing silt traps and the danger of flooding the surrounding areas.
We also hope more care is taken to prevent landslides, often linked to construction and bad weather.
Our calculations also show geopolitical disturbances next year. The corresponding poem for Malaysia in 2019 talks of how a farmer starts off the year optimistically but ends up with an unexpected outcome.
The harvest is very poor, and the cow left by the roadside is stolen by persons unknown.
It suggests problems will dog the government and the source is internal. Could this be inter-party friction among the coalition members or can the internal conflict within the parties cause a disruption? Will there be secret deals that will derail existing pacts and agreements? Let us wait and see.
The world, in general, will also not be faring well. One of the formulas recounted an event in ancient China when the government sent an army through a northern mountain pass to attack the Mongols.
The plans went awry as the army ended up in a temple, besieged by the enemy and decimated.
It suggests the possibility of armed conflict next year. A big possibility could be military action by the US, perhaps against Iran or North Korea. Given the volatility in Taiwan-China relations, that could be another flash point.
China has been trying to get Taiwan to reintegrate with the mainland and used various means to isolate the island-state from the rest of the world. Its patience may wear thin next year, and other measures might be taken.
In the best and worst of times, there are opportunities to be had. One would be best advised to be cautious next year, build up reserves and be on the lookout for a good bargain.
Source: Star Property