SINGAPORE: Ringgit can rally from here, after last week hitting its weakest level in more than three months.
As the currency is now 65 per cent undervalued to the dollar, according to IMF PPP metrics -- the selloff looks overdone and erroneous, relative to fundamentals.
Consensus forecasts put Malaysia's 2019 GDP growth at 4.5 per cent. The bond market looks attractive again after significant foreign outflows over the past few years, with real yields north of two per cent on offer and a potential rate cut
looming.
FTSE Russell scared investors last week when it said it may remove Malaysia from its world bond index, but the news is a red herring as the international market has been underweight the country's bonds for some time.