Exchange Rates for RM

[PuteriWorld]

Millions of Malaysians based in Singapore are loving Najib and celebrating SG50 = MYR 140 across the border.

The jam @ 2nd link starts after you stamp your passport. Welcome to Malaysia, a 6 hour wait.

Najib has done a brilliant job. I went to 4 massage parlours on Friday and all 3 rejected me downright and the last one made me wait for 20 minute.

The businessmen in Johor and Malaysia and Malaysians working in Singapore all love Najib and 1MDB.

Today's exchange SGD1 -> RM2.835 !!! All time low??!

What has Najib done to the country ???

http://www.xe.com/currencycharts/?from=SGD&to=MYR&view=12h

 

[PuteriWorld]

Err are you sure the obvious winners are those with no big tickets? After 30 years at least those "losing on rm" has a house in Malaysia to retire and relax.

Those that bought years ago would have lost a bit on their down payment & instalment via weakening RM$. But if RM$ keep the downward bias, even the current instalment that enjoy the weak RM$ will still lead to losses when you disposed of the property upon retiring of the entire loan quantum.

Obvious winner are those with no big ticket item committed.

 

[FHBH12]

Slide in Malaysia's reserves adds pressure to ringgit and ratings
Currency's volatility has prompted talk that capital controls could be next

By Pauline [email protected]

AUG 8, 20155:50 AM
Kuala Lumpur

MALAYSIA'S international reserves continued to slip, tumbling to US$96.7 billion as at July 31. The deteriorating finances is expected to put additional pressure on the ringgit - already at a 17-year low against the US dollar - and its current A- sovereign rating.

The US$3.8 billion reduction in two weeks from US$100.5 billion to below the psychological US$100 billion level could see the ringgit slide towards 4.00 to a US dollar - an occurrence that some project could happen as early as next week. Prior to the release of the data by Bank Negara on Friday evening, RHB Investment Bank senior economist Peck Boon Soon said that should reserves continue to fall, "confidence levels will drop", adding that the reserve coverage of 1.1 times short-term external debt was a little tight.

Already feeble, the ringgit had a torrid week, losing a massive 2.4 per cent against the US dollar to take its loss to 12.3 per cent year to date, marking it as the region's worst performing currency. The ringgit's volatility has prompted talk that capital controls could be next - the currency was pegged at 3.8 to the dollar as part of currency controls in 1998 during the Asian financial crisis and only lifted in 2005 - even though government officials have ruled it out.

Despite the precipitous fall to 3.926 to the US dollar on Friday - a new 17-year low - and around 2.82 to the Singapore dollar, the ringgit continues to face an uphill battle against increasingly bearish sentiments on the back of a flagging economy and political problems. In addition to a renewed slide in global oil prices to below US$50 a barrel, a looming rate hike by the US Federal Reserve could lead to more outflows as funds head back to improved yielding assets.

Still, many funds - portfolio in particular - have been motivated to leave because of the manner in which Prime Minister Najib Razak and his administration have dealt with official investigations into scandal-ridden and debt-laden 1MDB. Various allegations have surfaced about the state-owned company, including that some US$700 million was channelled into Mr Najib's personal bank accounts.

Despite the Malaysian Anti-Corruption Commission's findings that the funds from an overseas account were political donations - the donor or donors have yet to be revealed - few outside of Mr Najib's inner circle in Umno are convinced.

In any event, the ringgit continues to bear the brunt of scepticism over the entire fiasco - which has also tarnished Malaysia, and the rush to exit has noticeably accelerated in recent weeks. In all, nearly RM12 billion (S$4.2 billion) of portfolio funds are estimated to have left compared to almost RM7 billion for the whole of last year. Because foreigners still hold some 47 per cent of Malaysian government securities, the market is watching the segment nervously. Mr Peck said that the ringgit selloff has been sharper than the central bank would have liked, but with Malaysia's international reserves shrinking to current levels from a high of some US$140 billion in 2010, it does not have much leeway to intervene.

http://www.businesstimes.com.sg/gov...reserves-adds-pressure-to-ringgit-and-ratings

 

[snowbird]

Weak Ringgit
Shrinking National Reserve
Low oil and commodity prices
Exodus of foreign funds
Bearish stock market
Political instability

Perfect Storm!

Soon the will be an emergency revise to National Budget for sure.
Capital Control will probably follow soon if the situation don't improve to limit the rapid outflow of funds.

 

[Manhattan]

The ringgit will need to find another equilibrium. For property owner, we can only pray that the developer can finish the project, else it will be a repeat of the 97 crisis, with half complete buildings everywhere.

 

[FHBH12]

The ringgit will need to find another equilibrium. For property owner, we can only pray that the developer can finish the project, else it will be a repeat of the 97 crisis, with half complete buildings everywhere.

Some condominium projects have already stalled. Developers collected the deposits or downpayments but did not proceed with construction 1-2 years after launching. The other worries will be developers cutting costs so defects will be everywhere and poorer quality materials will haunt the owners 1-2 years after key collection.

 

[snowbird]

The ringgit will need to find another equilibrium. For property owner, we can only pray that the developer can finish the project, else it will be a repeat of the 97 crisis, with half complete buildings everywhere.

With the current exchange rate for USD/RM, the projects sold 2 years ago would have their profit margin reduced to nothing unless the developer had the leverage by advance procurement of their building materials.
Unfortunately, not many does that, so many will be working on a deficit budget if RM continue to fall.

 

[freekazoid]

With the current exchange rate for USD/RM, the projects sold 2 years ago would have their profit margin reduced to nothing unless the developer had the leverage by advance procurement of their building materials.
Unfortunately, not many does that, so many will be working on a deficit budget if RM continue to fall.

That is plain irresponsible speculation. Back it up...can you?

 

[snowbird]

That is plain irresponsible speculation. Back it up...can you?

Sorry about your ignorance to current affairs, currency exchange rates and general economy of the country concerned.
But which part to back up?
That the RM is now US$1 = RM3.94, with many predicting RM4 very soon is public knowledge( was about 2.9 in 2013), calculate the drop in percentage yourself please.
Cost of building materials factored before the sales in 2013 would cost that much more now and depends how much yet to be procured, the more not procured, the worse.
So, which part of my post is speculation???

 

[Manhattan]

The truth will come in the next 1 to 3 years when all the expected VP dates come closer. When the tide subsided we will know who had been swimming naked.

 

[RedsYNWA]

Sorry about your ignorance to current affairs, currency exchange rates and general economy of the country concerned.
But which part to back up?
That the RM is now US$1 = RM3.94, with many predicting RM4 very soon is public knowledge( was about 2.9 in 2013), calculate the drop in percentage yourself please.
Cost of building materials factored before the sales in 2013 would cost that much more now and depends how much yet to be procured, the more not procured, the worse.
So, which part of my post is speculation???

Err.....you do know that developers does not equal to contractor right? And for major contractors, many practised hedging also....... It's all part and parcel of managing the risks in the property and construction business.

 

[freekazoid]

Err.....you do know that developers does not equal to contractor right? And for major contractors, many practised hedging also....... It's all part and parcel of managing the risks in the property and construction business.

Thank you Reds. I didn't know that, but something sure missing if players dont mitigate common industry risks.

What I do know is last weekend new condo launch has a price tag more or less 2 years ago...with hefty discount too. What's up with that? Isn't that a big deficit given very weak RM. I don't pretend to understand it all just by reading news headlines...

 

[nitecrawllerr]

Cimb internet was 2.82xx this morning. Now 2.80xx. Should have change some in the morning.

 

[wolverine23]

Does anyone knows what will happen in the event that Malaysia impose capital control???

 

[snowbird]

Err.....you do know that developers does not equal to contractor right? And for major contractors, many practised hedging also....... It's all part and parcel of managing the risks in the property and construction business.

Many developers are also the main contractor through a subsidiary while some are in partnership.
Even if the developer is totally not related to the main contractor but if the main contractor gets into financial difficulties, its matters as much.
As for hedging, some main contractors would have issued POs and L/Cs for their bulk purchases of building materials to both local and overseas suppliers early.
But in this region, the developers get their payment from progress payment claim while the main contractor gets the same from the developer.
Hence, many main contractors (or developers), based on their financial strength, may not be able to finance all the purchases in one go so most likely only make purchases nearer to time required.
That's why I said, with lesser procured, the bigger trouble.

In this current financial climate, another factor that will affect the developer is the total sales achieved for the particular project.
As a rule of the thumb, the developer has to sell at least 70% - 75% to break even.
So, if the sales is below 70% after work commenced and sales is somehow stalled, there is a go chance that this project is running a deficit budget.
We all know in simple economy term, to make a profit you must buy low and sell high.
So the developer/contractor sold the project when currency was high and buy material when currency is low in a reverse, how to make a profit???
And the introduction of GST this year is really the double whammy!

But today, China devalued her RMB by 2%!
So, those Chinese developers who buy Chinese products for their projects may get some relief ( although many will swear that the high quality building materials are NOT from China)!

 

[snowbird]

Does anyone knows what will happen in the event that Malaysia impose capital control???

Malaysia had capital control in 1998 during the Asian Financial Crisis when Dr Mahathir was the PM.
That time, the RM was pegged to the USD @3.8 and any RM outside Malaysia are not legal tender ie worthless (so that you can't take RM out)
Capital control is basically to stem outflow of foreign funds and full control all forms of financial transactions, remittances etc.

 

[po2wq]

Does anyone knows what will happen in the event that Malaysia impose capital control???

if u sel ur msia haus, u cannot bring ur moni back 2 sinkielan ...

 

[Tekkun]

if u sel ur msia haus, u cannot bring ur moni back 2 sinkielan ...

No so terrible ....money can be transferred also. Except you need transfer the money through Malaysian banks.
You can also take your money and exchange with the money changers in Malaysia for Singapore dollars.

The whole idea is they do not want RM to be openly traded outside the country which sometimes no control who buy or who sell your money.
And they also do not want people to bring in and bring out lots and lots of money, causing havoc in the exchange rates.

So sleep gud gud tonite, okie?

 

[wolverine23]

Malaysia had capital control in 1998 during the Asian Financial Crisis when Dr Mahathir was the PM.
That time, the RM was pegged to the USD @3.8 and any RM outside Malaysia are not legal tender ie worthless (so that you can't take RM out)
Capital control is basically to stem outflow of foreign funds and full control all forms of financial transactions, remittances etc.

so you can only change SGD to MYR in Malaysia?

 

[snowbird]

No so terrible ....money can be transferred also. Except you need transfer the money through Malaysian banks.
You can also take your money and exchange with the money changers in Malaysia for Singapore dollars.

The whole idea is they do not want RM to be openly traded outside the country which sometimes no control who buy or who sell your money.
And they also do not want people to bring in and bring out lots and lots of money, causing havoc in the exchange rates.

So sleep gud gud tonite, okie?

Not so simple friend.
During that period, the money from the sale of properties and stocks were locked in the country so that money can only comes in and cannot goes out so easily.
It was not allowed to be remitted out within a period of time, I think it was 1 year, to prevent massive capital flight.
Except for businesses, as an individual, the amount you can remit out is controlled and limited.