by winston » Wed Oct 07, 2015 7:56 am
Forget China Stocks: 7 Investments That’ll Crash Next: iShares MSCI Malaysia ETF (EWM)
One of the few countries as exposed to China as South Africa and Brazil is Malaysia, a truly emerging economy that’s been growing by leaps and bounds recently.
In fact, Malaysia has been a true economic all-star in the region of late; gross domestic product grew by 4.7% in 2013 before speeding up to 6% GDP growth in 2014.
Unfortunately , the first half of 2015 has seen a mean mean reversion. Q1 saw GDP growth just slightly below what the country experienced in 2014, as the economy grew at a 5.6% clip.
But Q2 confirmed the slowdown was happening with rapidity, as 4.9% growth confirmed investors’ fears.
That slowing growth is a big reason iShares MSCI Malaysia ETF (EWM) is down 24% year-to-date, and the recent shenanigans with the Chinese stock market are a big reason EWM will likely continue to fall.
Malaysia’s economy is largely driven by its oil exports, and given the fact that China by itself imports 14.4% of all oil shipments in the world each year, softer demand from a weakening Chinese economy will materially impact Malaysian companies.
Source: Investor Place
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