By end-2010, we expect the ringgit to appreciate about 5% against the US dollar (to RM 3.24/USD).
Beneficiaries will include:
- aviation (MAS, Air Asia) and
- the steel sector (Southern Steel, Kinsteel),
where there is a high proportion of USD-denominated costs.
Losers will include:
- exporters (Evergreen Fibreboard) and
- MISC.
Rubber glove manufacturers (Top Glove, Kossan) price their products in USD. However, we understand glove players usually adjust prices to factor in currency movements.
The prospect of an appreciating ringgit could further boost returns for
foreign investors.
Ref: HwangDBS Vickers Research
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