Has The Dust Settled?

Asian stock markets have largely recovered on the first trading day of the week, despite Wall Street's second consecutive day slump last Friday. This could well be a sign that Asian markets have discounted the potential impact of US subprime woes on global economies particularly Asia, given the robust economic growth outlook of most major Asian countries led by powerhouse China and India. In fact, Asian economies efforts in undergoing a deliberate structural shift to reduce dependence on external markets and to make domestic demand a key growth driver may begin to bear some fruits, as intra-regional trades and domestically driven demand increase.

As a matter of fact, some analysts started to impose the view that recent market corrections were healthy for the general market performance, as most Asian stock markets had achieved historical highs. Such corrections are certainly good to recharge some batteries and provide great opportunity for investors to accumulate valued stocks on weakness.

For Malaysian stock market, again the index holds up quite well yesterday. This is partly due to the announcement of the setting up of another special economic region this time in the north region of Peninsula Malaysia. This is a USD51.2 billion (RM177billion) project codenamed Northern Corridor Economic Region (NCER), covering the states of Perlis, Kedah, Penang and Perak. More details on NCER later.