April 21, 2014 | Valerie Wong
At present, the first thing people think of when they hear the name "Malaysia" is the missing Malaysia Airlines 777 plane (not to be confused with the 747 plane) that has vanished mysteriously as though it had passed through the Bermuda triangle. However, investors know better than to not invest in Malaysia after that newsworthy event happened (although, understandably, the stock for Malaysia Airlines plummeted as soon as it occurred). As long as you know the ins and outs of the culture of Malaysia—a multicultural, multi-ethnic, and multilingual society as varied and diverse as New York—you can hit the jackpot as far as investing is concerned.
Things to Consider When It Comes to Investing in Malaysia
There are different markets and fields to consider when investing in Malaysia. You can categorize them in three ways: Frontier markets, emerging markets, and developed markets. Your safest bet is investing in developed markets with the largest, most industrialized economies (except maybe when they're undergoing an economic downturn). Next, there are emerging Malaysian markets that can yield extremely high growth potential that can sometimes translate to investment returns greater than that of developing markets because you're becoming one of the vanguard investors. However, such industries aren't necessarily stable, such that you might be investing in zeppelins instead of the car industry depending on how things pan out.
Speaking of being a vanguard investor, Malaysia also features frontier markets that showcase the next wave when it comes to investment destinations. The Internet is certainly a new frontier, and so are virtual offices ad ecommerce. The risk for these markets have lowered now that big businesses are backing them up, but your approach to them as a channel to invest in Malaysia needs to be treaded carefully, since they're smaller than traditional emerging markets (at least, the non-established startups are) and you still need to keep in mind the rules and regulations of Malaysia when using them as a means for investment.
The Malaysian Culture and How It Affects Investment
Malaysia has a 1972 National Culture Policy which states that the culture of Malaysia is based on its indigenous people's cultures, that if the different hodgepodge of cultures are deemed reasonable and suitable they'll be deemed as part of Malaysian culture, and Islam is part of the national culture of Malaysia. Therefore, when investing in Malaysia, it's important to remember that you're catering to an Islamic and conservative market. Never do anything or enter any business that's an insult or is illegal by the tenets set in Islam. It's the same with the United States and its conservative Christian demographic.
Just as you'd never do anything that would insult "Soccer Moms" and the "Conservative Right" in the U.S.A., you should never enter a business or market that would be considered an affront to the religious Islamic leaders of the mostly Islamic state of Malaysia. The best investment ideas in Malaysia involve third-party existing companies that have already established the acceptable markets that are popular in the country (most financial markets and bank-based investments). Also, don't be intimidated by the Islamic culture; the World Bank itself rates Malaysia as the sixth friendliest country in the world when it comes to doing business and investing.
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