Monday, July 16, 2018

Spinning confidence need be sensibly done

In December 11, 2017, The Edge reported the Senior Vice President of UOB Malaysia forecasting ringgit to strengthen for 2018  from the level than of 4.07 to below the psychological level of 4.00.

That was a gutsy, specific and justifiable forecast made. The details HERE. Ringgit was flat that month before US dollar nosedive against ringgit to actually went as low as near 3.85.

Unfortunately, the economic senario took a different course and all the markets went under with ringgit weakened sharply and is expected to weaken further.

Confidence level on the economy, and the country is low. The euphorio is not over, but it will be once public realised the economic mess the new administration made. Lim Guan Eng screwed it big time with his so-called I am telling the truth bull.

After latex down and oil palm below RM2,100 per tonne, ringgit is expected to be do a sharp nose dive against US dollar. The opposite to the US dollar nosedive against ringgit the last time around.

Expectedly, the power at be are seeking media and analyst to avert the inevitable by painting a rosy picture and shed some confident on ringgit. Consequently, NST report yesterday reported ringgit can strengthen with a headline of 3.20.

Heaven's to Mega Troud! Ringgit is now 4.0250. At least, spin the story intelligently.

Firstly, the forecast was 3.20 to 3.50 in two to five years time. Who in hell could forecast curency with surety and accuracy beyond 3 months?

Two, the MD of Affin Hwang DBS backed his claim based on ringgit is currently performing well against other currency in the region. Was he on Mars when ringgit was plunging at a time  regional currencies remain steady?

Three, he said the reason is Malaysia's huge trade surplus. Only shows the man may have not been buying durian lately. Price of Musang King has dropped significantly and growers could be dumping cancelled orders of China bound durians.

China practically cancelled palm oil and prices of below RM2.100 per tonne is way below cost of production at around RM2,300 per tonne. Latex down too. Tourism from major market China dropped.

If Malaysia do not send back Zakir Naik to India, they will stop ordering oil palm and Indian tourist too will stop coming to Malaysia!

Fourth, they assumed ringgit movement post-GE 13 will be duplicated post-GE 14. What relevence do past event have relevence with present situation?

The country is facing the possibility of being isolated internationally by the Middle East, China, US, maybe Europe and Mahathir quareling with our neighbours. Does Affin Hwang DBS not notice that?

Sometime analyst not conversant on currency should not be a wise guy to talk on market they have no competency in reading.

For instance, NST again reported on June 14 of Kenanga Investment Bank forecasting ringgit to drop to 4.05 for year end.

Heaven's to Mega Troud! Ringgit then was on the brink of busting the 4.00 level. Money was flowing out of the country like a Gua Musang under flood. The dude mere forecasted for a 500 point move.

In a month, it is already near 4.05!

Back in our trading days. forecast like this could be described as the forecast any Bangla Deshi pump attendant can do.

Though the range of Affin forecast is fairly narrow at within 3,000 points for a 3 to 5 years landscape, it would have been called a forecast range a train could enter in between and do a U turn had it be for short term.

Traders were expected to to give two way quote that is fairly narrow within 5-10 points to clients and other Banks. Anything wider they will be yelled at for giving grandmother quote.

If that is not clear, a more graphic description is a quote as wide as Linda Lovelace vagina.

With economy so uncertain and made gittery due to a Finance Minister emulating the foul mouth of the Prime Minister, the burden of reviving confidence falls upon media and analysts.

However there are too much bullshiting and opinions without facts and figures to be of help.

It only serve to deceive the common folks and perhaps, bodek the new government leaders but it does not convince those with discerning eyes and those that really matter.

1 comment:

Unknown said...

Heang dbs and uob management are hardcore tUrn devotees and dap strongest la bro.. What can u say..

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