Malaysia's `Bombed Out' Ringgit Lures Mobius to Nation's Sharesby and
Mobius says ringgit `very, very, attractive at this stage'
Currency is rebounding this month as Fed rate bets fade
Malaysia’s ringgit has really “bombed out” and that makes some of the nation’s stocks attractive, Mark Mobius, chairman of the emerging-markets group at Franklin Templeton Investments, said in an interview.
Global funds have pulled 41.5 billion ringgit ($10 billion) from the country’s debt and equities this year amid a 16 percent slide in the ringgit. That’s the biggest in Asia and already exceeding any annual loss since the regional financial crisis. Malaysia is vulnerable to the slump in Brent crude because it’s Asia’s only major net oil exporter, with the currency’s losses exacerbated by China’s slowing economy, a broad selloff in developing nations and a political scandal involving the prime minister.
“I think it’s so undervalued now,” Mobius said in Bangkok on Wednesday, adding that he’s buying Malaysian stocks amid the currency’s plunge. “The ringgit is very, very attractive at this stage. I don’t see how it could go down much more. It could, but I think on a price-parity basis, it’s very undervalued.”
The FTSE Bursa Malaysia KLCI Index of shares dropped 11.8 percent over the last two quarters and reached the lowest level since 2011 in August. Valuations are near the cheapest since 2012, data compiled by Bloomberg show. The benchmark and the ringgit have both rebounded about 6 percent this month as fading bets for a U.S. interest-rate increase this year revitalize demand.
The ringgit strengthened 1.1 percent to 4.1360 a dollar as of 3:45 p.m. in Kuala Lumpur and has appreciated 8.3 percent since dropping to a more than 17-year low on Sept. 29, according to prices from local banks compiled by Bloomberg.