Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
UK Coronavirus Infections and Deaths Trend Trajectory - Deviation Against Forecast - 1st Apr 20
Huge Unemployment Is Coming. Will It Push Gold Prices Up? - 1st Apr 20
Gold Powerful 2008 Lessons That Apply Today - 1st Apr 20
US Coronavirus Infections and Deaths Projections Trend Forecast - Video - 1st Apr 20
From Global Virus Acceleration to Global Debt Explosion - 1st Apr 20
UK Supermarkets Coronavirus Panic Buying Before Lock Down - Tesco Empty Shelves - 1st Apr 20
Gold From a Failed Breakout to a Failed Breakdown - 1st Apr 20
P FOR PANDEMIC - 1st Apr 20
The Past Stock Market Week Was More Important Than You May Understand - 31st Mar 20
Coronavirus - No, You Do Not Hear the Fat Lady Warming Up - 31st Mar 20
Life, Religions, Business, Globalization & Information Technology In The Post-Corona Pandemics Age - 31st Mar 20
Three Charts Every Stock Market Trader and Investor Must See - 31st Mar 20
Coronavirus Stocks Bear Market Trend Forecast - Video - 31st Mar 20
Coronavirus Dow Stocks Bear Market Into End April 2020 Trend Forecast - 31st Mar 20
Is it better to have a loan or credit card debt when applying for a mortgage? - 31st Mar 20
US and UK Coronavirus Trend Trajectories vs Bear Market and AI Stocks Sector - 30th Mar 20
Are Gold and Silver Mirroring 1999 to 2011 Again? - 30th Mar 20
Stock Market Next Cycle Low 7th April - 30th Mar 20
United States Coronavirus Infections and Deaths Trend Forecasts Into End April 2020 - 29th Mar 20
Some Positives in a Virus Wracked World - 29th Mar 20
Expert Tips to Save on Your Business’s Office Supply Purchases - 29th Mar 20
An Investment in Life - 29th Mar 20
Sheffield Coronavirus Pandemic Infections and Deaths Forecast - 29th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast - Video - 28th Mar 20
The Great Coronavirus Depression - Things Are Going to Change. Here’s What We Should Do - 28th Mar 20
One of the Biggest Stock Market Short Covering Rallies in History May Be Imminent - 28th Mar 20
The Fed, the Coronavirus and Investing - 28th Mar 20
Women’s Fashion Trends in the UK this 2020 - 28th Mar 20
The Last Minsky Financial Snowflake Has Fallen – What Now? - 28th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

Malaysia’s Rich Natural Resources: The Next Great Asian Investment Opportunity

Economics / Emerging Markets Jan 19, 2011 - 08:32 AM GMT

By: Tony_Sagami

Economics

Best Financial Markets Analysis ArticleLast week I flew to Penang, Malaysia, and traipsed around the countryside in sweltering heat and humidity looking for the next great Asian investment opportunity. I found several amazing ones. But some background first …

Penang is a fascinating island city that sits a few miles on the Indian Ocean side of the Malaysian mainland near the northern mouth of the Straits of Malacca. It is this strategic location that turned Penang into one of the most important commercial trading centers in Southeast Asia.


Penang was discovered in 1588 by Sir James Lancaster, who had served under Sir Francis Drake. The island, originally called the Prince of Wales Island, was first settled in 1786 by the British East Indian Trading Company for the purpose of trading spices, such as: Pepper, nutmeg, cinnamon, tamarind, and opium. Penang became a thriving port and had over 10,000 residents within 10 years.

Today, 900,000 people live on Penang Island. It has become a thriving Southeast Asian technology hub and is referred to as Silicon Island. A virtual who’s who of the technology world — Dell, Intel, AMD, Altera, Motorola, Agilent, Hitachi, Osram, Plexus, Bosch and Seagate — have offices and manufacturing facilities in Penang. And 45% of the island’s economy is based on technology.

Malaysia as a whole is an exciting, vibrant, and thriving economy. Most Americans think of Malaysia as an exotic, underdeveloped country. But it has 28 million residents, is the 29th largest economy in the world, and its citizens have an average annual income of $14,900 a year.

Another underappreciated but key business advantage: Almost all Malaysians, thanks to the British rule from 1786 to 1957, speak English. This is a huge plus for attracting western businesses to set up shop in Malaysia.

The Malaysian stock market has reflected that economic prosperity. It was up 19% in 2010, and I believe it has many more years of prosperity ahead of it. Long term, investing in Malaysian stocks should be very rewarding.

Although Malaysia has thriving technology and financial industries, the country’s rich natural resources excite me the most. The spice trade may have originally attracted traders and merchants to Penang, but it was the discovery of rich deposits of natural resources on the Malaysian peninsula that powered its economic growth.

I’ll break them down for you …

RENEWABLE NATURAL RESOURES

Malaysia is world's largest exporter of palm oil.
Malaysia is world’s largest exporter of palm oil.

Palm oil: Palm oil may not sound like a very important natural resource, but it is the primary cooking oil used in Asia. And Malaysia is the largest exporter of palm oil in the world. Plus, clever Malaysian scientists are developing efficient ways of converting palm oil into ethanol. Boustead Holdings (2711.KL) operates 286,000 acres of palm oil trees.

Rubber: I have written many times about the booming automobile sales in China. So you need to ask who provides all those tires for all those new cars? Instead of investing in tire companies, like Goodyear or Cooper Tire, you could invest in companies that produce rubber. Malaysia is the third largest rubber producer in the world (Thailand is number one and Indonesia is number two) and Kossan Rubber Industries (7153.KL) has the wind at its back.

Timber: Thanks to its tropical climate and abundant rainfall, Malaysia is COVERED with trees. A lot of those trees — teak, sandalwood, ebony, and ironwood — can be turned into valuable lumber products. Jaya Tiasa Holdings (4383.KL) is one of Malaysia’s top timber producers.

NON-RENEWABLE NATURAL RESOURCES

Oil: Malaysia is blessed with massive deposits of oil and is one of the largest non-OPEC oil exporters in the world. Malaysia’s state-owned energy giant, Petronas Gas Berhad (6033.KL), is so profitable that its royalties provided 44% of the government’s total revenues last year.

The soaring demand for tin could continue to push prices up over the next five years.
The soaring demand for tin could continue to push prices up over the next five years.

Tin: Of the six basic principal base metals — tin, copper, iron, lead, zinc, and lead — tin increased the most last year rising by 59% to as much as $27,500 per metric ton. It is expected to hit $40,000 on growing demand within the next five years. And Malaysian Smelting Group (5916.KL), the largest tin producer in Malaysia, could be a big winner.

Now, I am not recommending you rush out and buy any of the above stocks tomorrow morning. As always, timing is everything. So I recommend you first do your own homework to make sure those companies are appropriate for your personal situation AND then wait for them to go on sale.

However, I know that many of you will ignore these five Malaysian companies because they’re listed on the Kuala Lumpur Stock Exchange. I don’t know why but most investors I talk to seem to have a phobia about buying stocks on a non-U.S. exchange. I think that’s shortsighted …

It only costs a few dollars more (no more than $20 or $30 per trade if you use the right broker) to trade foreign stocks. Plus it’s simple and easy. Here are some examples:

  • E*Trade offers trading on six of the largest international markets — Canada, France, Germany, Hong Kong, Japan, and the United Kingdom — through its online trading platform.
  • EverTrade offers trading in 22 markets — Australia, Austria, Canada, Denmark, Finland, France, Germany, Hong Kong, Italy, Japan, Mexico, Netherlands, New Zealand, Norway, Russia, Singapore, South Africa, Spain, Sweden, Switzerland, Thailand, and the United Kingdom — for a flat $50 per trade.
  • NobleTrading is an online discount trading company based in New York and also trades in 22 countries — Australia, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Mexico, New Zealand, Norway, Portugal, Russia, Singapore, South Africa, Sweden, Thailand, the United Kingdom.
  • Boom Securities may be the best choice if you are primarily interested in trading Asian stocks because it includes Australia, China, Hong Kong, Korea, Indonesia, Japan, Malaysia, Philippines, Singapore, Thailand, and Taiwan. Trading commissions vary by country. But Hong Kong, for example, is 0.18% plus some minor currency/tax fees (minimum $12). That means that any investment under US$6,000 would roughly cost the minimum $12. Cheap!

You might notice that I didn’t include the two largest discount brokers, Charles Schwab and Fidelity. That is because while they do offer foreign trading, they charge too darn much.

What I want you to realize is that (a) the most exciting investment opportunities are across the Pacific Ocean and that (b) investing in foreign stocks is easy and cheap.

Best wishes,

Tony

This investment news is brought to you by Uncommon Wisdom. Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. From time to time, the authors of Uncommon Wisdom also cover other topics they feel can contribute to making you healthy, wealthy and wise. To view archives or subscribe, visit http://www.uncommonwisdomdaily.com.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules