Is there value in Malaysia's equity market, despite political crises?

Julian Mayo, co-CIO of Charlemagne Capital (UK), discusses the outlook for Malaysia following his recent visit.

We visited Malaysia recently and were struck by how cheap it was. Its currency, the ringgit, had fallen from 5.40 to 6.40 versus sterling in the year since our last visit. Unlike most weak-currency economies, this was not due to high inflation, which is running at below 2.5%. The weakness is caused by a number of factors, including the overall malaise affecting emerging markets; the fall in commodity prices (Malaysia is an exporter of oil and gas, chemicals and palm oil); and a political scandal relating to $700m from 1 Malaysia Development Berhad, an indebted development fund, which ...