Malaysian banks solid, says investment guru

Malaysian banks are solid as they are not involved in risky financial instruments such as derivaties by US banks, said investment guru Dr Marc Faber.

Faber, publisher of the widely-read Gloom, Boom & Doom report, said despite Fitch Ratings' recent negative outlook on Malaysia, the country was relatively well compared to other emerging countries.

Given the choice of between the US and Malaysian equities, Faber expressed more interest towards the latter.

"Malaysian equities are not exciting. However, they are relatively stable, supported by a well-balanced economy coupled with no major downward risks," he said.

Malaysia's financial condition, Faber said, was one of the strongest in the world today due to the prudent management of its financial system.

Faber said that in Malaysia, he owned shares in some companies in the consumer sector as well as the banking sector, such as Public Bank and Malayan Banking Bhd.

He said the stocks in the consumer sector were inexpensive a few years ago and now they were fully priced, with limited upside.

"While they are not going to explode, they can still grow in the long term, parallel to the country's economy," he said.

On Malaysia's revision downwards in the growth projection of between four-five per cent, he said people should keep in mind that this was growth in a world where most countries, like European countries, were not growing.