Tuesday, February 25, 2014

Credit Suisse calls PM Najib a "Economic Hero"

In their latest analyst report on Malaysia dated 24th Feb 2014, top international bank Credit Suisse has praised PM Najib as an economic hero and has said the ETP is showing great results and he has made bold but temporarily unpopular steps that have strengthened the economy which will eventually benefit the Rakyat in the next few years and hence positions PM Najib for a good 2018 GE14 showing.

Credit Suisse is a member of Wall Street's bulge bracket, a list of less than a dozen of the largest and most profitable banks. The company has been identified as one of the world's most important banks, upon which international financial stability depends. The bank is also one of Fortune Magazine's most admired companies.

Excerpt from Credit Suisse's report on Malaysia:
We believe that PM Najib will be feted as an economic hero. On his watch, we have seen strong GDP momentum and transformation.

PM Najib represents a country with little political risk, given that he now has a ‘real’ mandate, with two election wins (GE and UMNO) under his belt. Any talk of a political challenge is highly parochial, in our view.

He is considered an economic hero by institutional investors. Malaysia sailed through the Global Financial Crisis unscathed and even saw economists upgrading their GDP forecasts as the benefits of the ETP were felt.

Indeed, our economists have just upgraded their forecasts last week, expecting 2014 GDP growth of 5.3%.

Balancing the fiscal budget PM Najib has aggressively tackled the fiscal deficit via a programme of austerity and the promise of GST, much to the delight of investors.

While this was never going to be popular domestically, if the markets are convinced that Malaysia can balance its fiscal budget, it will lead to a better credit rating, which will translate into a stronger currency without the need to raise rates and therefore a stronger economy. As the benefits are reaped by the people, the pain will be forgotten and PM Najib will be feted as an economic hero, both at home and abroad.

If that happens, he will, in our view, be well set for 2018 elections.

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