QUOTE(skiddtrader @ May 12 2008, 03:51 PM)
It's hard to foresee what would happen. Even during the last election, both sides restrain themselves when the results were official. Although I do have my own share of fear of the chaos that might occur if PR were to suddenly take power. The issue is the transition of power whether it would be as smooth as the last election which is not perfect but not totally chaotic. but lets not divert from the topic.
The question still stand, what would you do with your investments in KLSE when the politics in Malaysia goes upside down. It's no secret that if the present BN governemnt were to fall, a lot of GLCs might take a real beating and might not even recover. Although not all GLCs are completely useless, it can't be helped to think that they can be what they are at the moment without the help of the government. I doubt the smaller ones can survive and will most likely be gobbled up by their bigger counterparts.
KLSE weighted average depends a lot on GLCs to hold it where it is. If all major GLCs are sold-off, we can probably see KLCI drop to 500-800 points again I'm guessing. But imagine other counters that are not GLC, like if Public Bank were also sold off in the panic and drop to RM6.00 again for instance, will you buy it?
That's true, golden oppotunities might emerge for those company that are origin competitive in nature and not rely on gov to secure their business one.The question still stand, what would you do with your investments in KLSE when the politics in Malaysia goes upside down. It's no secret that if the present BN governemnt were to fall, a lot of GLCs might take a real beating and might not even recover. Although not all GLCs are completely useless, it can't be helped to think that they can be what they are at the moment without the help of the government. I doubt the smaller ones can survive and will most likely be gobbled up by their bigger counterparts.
KLSE weighted average depends a lot on GLCs to hold it where it is. If all major GLCs are sold-off, we can probably see KLCI drop to 500-800 points again I'm guessing. But imagine other counters that are not GLC, like if Public Bank were also sold off in the panic and drop to RM6.00 again for instance, will you buy it?
On the statement of 'not all GLCs are completely useless', that's fair but it is also difficult to find GLCs that are evolving from their own competitiveness.
Just my 2 cents.
May 12 2008, 04:11 PM
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